W-9 for LLCA tick does not file the election
Owners worry the form quietly turned the company into an S corporation. It did not.
Ask about the election
Three papers that get collapsed into one panic.
Form 2553 asks the IRS to tax the company as an S corporation. Form 8832 asks for a classification change. The form a customer is waiting on tells that customer what you say is already true. Collapsing the three into one checkbox is the mistake this page exists to undo.
If the customer demands the S box and you have no acceptance letter, you can give the true box or you can delay the payment. A false box is worse than waiting. The information return will follow the false box into a year you then have to explain.
A company can carry one label on the formation paper and a different classification on the federal return at the same time. Owners often prefer the state label because that is the name on the certificate. The form reports the tax classification anyway. The two papers are allowed to disagree, and pretending they are the same document is how a false box gets signed.
What an S election actually asks of the year.
Shareholders sign Form 2553. There is one class of stock. The owner who works takes reasonable compensation before taking distributions. That compensation is a wage run by a provider you choose. We set the registrations and the wage conversation up. We do not run the Friday.
The saving people hope for is employment tax on profit that is not wages, minus the cost of the extra return, the payroll provider, and the extra filings that come with the election, and minus or plus the effect on the qualified business income deduction. We will sketch whether the shape fits. We will not print a promised dollar on a public page. A year under a rough threshold often loses the sketch to the cost. A one-year spike is a weak reason to elect.
An S corporation that never issued a K-1 to the owner who filed is a company that exists on paper and not on the return. That is a repair, not a vibe. The books, the wage, and the K-1 have to find each other before anyone talks about next year's form.
The state does not follow the tick either.
Forming the company and electing the tax treatment are different errands. The state office that recorded the company keeps the formation paper. The IRS records the election. A form handed to a customer does neither of those jobs, and a tick on that form does not move either file.
A paper you give a customer in March can still be the wrong box in April if the acceptance letter has not arrived. The customer's copy does not prepare the federal return, and it does not prepare any state report that still has its own due date. Those calendars move only when their own forms are filed.
Payroll setup, if the election is accepted, belongs in the same season as the wage decision. Waiting until the first Friday after you told a customer you were an S corporation is how deposits get missed. The provider should be chosen while the letter is still news.
A choice you can still make.
While the year is open, you can still ask whether the election belongs in this year or the next one. After the year closes, the conversation changes. We would rather have it while a date can still move.
If you do not need the election, the disregarded box is not a failure. It is a true description. Plenty of companies should stay disregarded. The form gets easier, not harder, when you stop apologizing for that.
You will be talking to the Steven Palmieri practice. Bring the timing. Sometimes the useful answer is to keep the company disregarded, and we will say that out loud and end the call.
Is there an acceptance letter
You will be talking to the Steven Palmieri practice.