In last week's blog, A Guide to the S Corporation, you learned the definition, tax benefits, and requirements of an S corporation.
In this blog post, you'll learn how to form an S corporation in 3 steps.
Step 1. Form a corporation or LLC
Corporations and LLCs are formed at the state level, typically with the secretary of state or the state division of corporations. File the appropriate formation documents in the state where the company will be located and pay the requisite filing fee.
Step 2. Obtain an Employer Identification Number (EIN)
After forming your company at the state level, you will need to obtain an EIN. You do this by filing Form SS-4 with the IRS. You can apply for an EIN online, by mail, or over the phone (for international applicants).
Step 3. File Form 2553 with the IRS
On the IRS form, you will need to list the following information:
- Company name
- EIN number
- Company address
- State of incorporation and date incorporated
- Effective date of S corp election
- Shareholder or member information
- Fiscal tax year information
Once you file Form 2553 with the IRS, it will take approximately 60 days to receive a response letter from the IRS. Once you receive the IRS' acceptance letter, you are now officially operating your company as an S corporation.
Not interested in forming an S corporation? Learn more about which business structure works best for you or get information on forming PLLCs, PAs, and other professional entities.