LLCs Taxed as S Corporations: Requirements and Common Pitfalls Checklist

Summary

This checklist provides a list of steps to follow to ensure that your limited liability companies (LLC) is eligible for S corporation status under the Internal Revenue Code (IRC) and takes all required steps to make such an election. An LLC can be taxed as an S corporation, but an S corporation is not always a good choice. Learn the tax options available to LLCs and the advantages and disadvantages of electing to be taxed as an S corporation. In evaluating the procedures for eligibility, this checklist will focus on the definition of small business corporations, eligible entities, ineligible entities, terminations, late election relief, and Form 2553, Election by a Small Business Corporation. This checklist also points out key issues to help you evaluate the U.S. federal tax implications to your members and the LLC of S corporation status.