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6 Replies Last post: Nov 19, 2008 2:47 PM by hassimo

Switching from LLC to S Corp

Nov 7, 2008 12:00 AM

Click to view therapy4kids's profile Start-up therapy4kids 1 posts since
Nov 6, 2008

My first question is can I continue to use my current TID? Switching with current vendors may get complicated. My net income for this year will be over 100k and in research it appears that I will be able lower my tax burden by shifting a portion of my income to dividend income. Next year's income will be even higher. Not needing any type of payroll service and making draws as needed has been nice. My goal is to make the switch January 1st. Any thoughts?
Thanks
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Click to view Elite1's profile Mogul Elite1 64 posts since
Nov 14, 2008
1. Re: Switching from LLC to S Corp Nov 21, 2008 10:45 PM
in response to: therapy4kids

An LLC is created by the state. The IRS does not recognize an LLC as a separate tax classification. They classify you as a corporation, partnership or sole proprietor. I assume you are currently being taxed as a sole proprietor or partnership. In either case, the answer is yes. You need a new EIN if you are changing your tax classification. If you want confirmation of this or to accomplish this via telephone, the IRS business number is 1-800-829-4933.

In order to switch to an S Corp you simply need to file IRS Form 2553.

Hope this helps.

Tanya
Elite Financial Services, LLC

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