An LLC (or corporation) taxed as an S-Corporation CAN revoke a previously filed S-Election provided the decision to revoke as the proper consent (a majority vote of the shareholders/members at a minimum).How to Revoke an S-ElectionTo revoke an S-election, the entity will need to file a revocation statement with the IRS at the same service center that the S-Election (Form …
Why would an LLC want to be taxed as an S Corporation?
An LLC is a pass-through entity unless you tell the IRS otherwise. In other words, profits and loses are passed through to the LLC’s owners. One reason an LLC would want to be taxed as an S corporation is to save money on self-employment taxes (i.e. medicare & social security). As of the writing of this article, self-employment taxes equaled …
What is an S Corporation?
An “S corporation” is essentially a traditional corporation (C corp or professional corporation) that elects pass-through tax status. It is important to note, however, that an LLC can also elect to be taxed as an S corporation. To make this election, the entity would notify the IRS by filing Form 2553 with the IRS (the S Election). Once the corporation …