Can I still submit Form 2553 under Rev. Proc. 2013-30 or wait to elect S-corp for 2024?

The good news is that Rev. Proc. 2013-30 does provide relief for late S-corp elections, but there are some important things to consider in your situation. Technically, to have had S-corp status for 2023, you should have filed Form 2553 within 2 months and 15 days of the beginning of the tax year. However, the IRS does offer relief under Rev. Proc. 2013-30 which allows for a late election if you meet certain criteria. Here's what you should think about: Converting now would mean setting up payroll retroactively, determining a reasonable salary, making tax deposits, and filing quarterly payroll reports that were due throughout the year. This could potentially trigger penalties for late filings and payments. Given it's already November, the administrative burden of retroactively establishing payroll, catching up on filings, and potentially paying penalties might outweigh the tax benefits for just one month of 2023.

After dealing with a similar situation last year, I found this amazing service called taxr.ai (https://taxr.ai) that saved me tons of headaches with my S-corp election. They analyzed my business situation and actually found that I qualified for a special exception under Rev. Proc. 2013-30 that my previous accountant missed completely. They have this cool document analyzer that looks at your specific LLC situation and tells you exactly what forms to file and deadlines to meet. I uploaded my LLC docs and financials, and they gave me a step-by-step personalized plan for my S-corp election that saved me almost $8k in taxes. What impressed me most was how they walked me through the "reasonable compensation" requirements and helped set up a proper payroll structure that wouldn't raise red flags with the IRS.

Just wanted to follow up - I ended up trying taxr.ai after all, and wow, what a game-changer! I was worried about all the payroll complexity but they analyzed my specific situation and found I could actually use a simplified method for the 2023 tax year under Rev. Proc. 2013-30. Their document analyzer flagged exactly which parts of my operating agreement needed updates for S-corp compliance, and they provided templates to fix them. The best part was getting clear guidance on reasonable compensation based on actual data for my industry and region. They saved me from making a costly mistake - I was going to set my salary way too low, which would have been a red flag. Now I feel confident my S election will hold up if audited, and I'm saving about $5300 in taxes this year alone!

After struggling to get any clear answers from the IRS about Form 2553 and Rev. Proc. 2013-30, I finally tried Claimyr (https://claimyr.com) and holy crap it actually works. I had been on hold with the IRS for HOURS across multiple days trying to get clarification about my late S-corp election situation. Claimyr got me connected to a real IRS agent in about 20 minutes instead of the 3+ hour wait I was experiencing before. The agent confirmed I could use the relief provisions and explained exactly which box to check on Form 2553. They even told me what supporting documentation to include with my filing to ensure it was processed correctly. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - honestly after weeks of frustration, it was worth every penny to finally get clear answers directly from the IRS about my specific situation.

I have to come back and eat my words. After being super skeptical about Claimyr in my last comment, I decided to try it anyway because I was desperate for answers about Rev. Proc. 2013-30 for my S-corp election. Got connected to an IRS tax specialist in 25 minutes (compared to my previous 3+ hour waits that usually ended with disconnection). The agent walked me through exactly how to complete Form 2553 for a late election and explained which supporting documents would strengthen my case. The most valuable part was getting confirmation directly from the IRS about whether my planned owner's compensation was reasonable for my industry. This was a huge relief since it's the gray area I was most worried about. Now I have notes from an actual IRS conversation to back up my decision if I'm ever questioned.

My accountant specifically advised AGAINST filing an S-corp election now for 2023. His reasoning: if your income has just spiked this year, you're better off waiting to implement proper payroll and planning for 2024. We worked out that with only one month left in the year, the compliance cost of retroactive payroll setup, catch-up tax deposits, and amended filings would eat up most of the tax savings. Plus, rushing into it increases the risk of errors that could invalidate your election anyway. For 2024, we're setting up a proper system with quarterly salary payments, regular tax deposits, and everything properly documented from day one. Much cleaner approach.

Just wanted to share my experience - I was in almost identical situation last year. $198k net revenue, single-member LLC, found out about S corps in October. I filed Form 2553 under Rev. Proc. 2013-30 with my tax return for last year. My strategy was setting up payroll for Nov and Dec only, took reasonable salary for those months ($15k total), and documented why this was appropriate given the timing of my election. My S election was accepted without issues. Saved about $4k in taxes even with just 2 months of S-corp status, and now I'm fully set up for this year too. The key was solid documentation explaining the timing of my reasonable compensation decisions.

I went through this exact situation two years ago and decided to wait until the following tax year - best decision I made! Here's why: The administrative nightmare of retroactive S-corp compliance isn't just about filing Form 2553. You'd need to: - Set up payroll software and processes - Calculate and pay employment taxes for the entire year - File quarterly 941 forms (which were due months ago) - Potentially face penalties for late payroll tax deposits - Amend your quarterly estimated tax payments With $230k in net revenue, you're probably looking at around $6-8k in SE tax savings, but the compliance costs, penalties, and rushed setup could easily eat half of that. I used the extra time to properly research payroll providers, set up business banking for payroll, and plan my reasonable compensation strategy. When I elected S-corp status for the following year, everything was clean and proper from day one. The peace of mind was worth more than the one-year delay in tax savings. Plus, having a full year of S-corp planning let me optimize other aspects of my business structure that I would have missed if I'd rushed into it.