Do I need to file Form 2553 (S-Corp Election) every year or just once?

12 Thanks for clearing that up! I was stressing about having to file the 2553 again. One more question - what if I change my business address? Do I need to notify the IRS about that change or file the 2553 again with the updated info?

8 You don't need to file Form 2553 again for an address change. Instead, you should notify the IRS about your new address by filing Form 8822-B (Change of Address or Responsible Party - Business). This ensures the IRS has your current contact information for any future correspondence. As for your tax filings, you'll simply use your new address on your annual Form 1120-S when you file. The S-Corp election itself is tied to your business entity's tax identification number (EIN), not the physical address.

7 How accurate is this tool for more complex S-Corp situations? I have multiple shareholders and some foreign income - would it still work for my situation?

3 Sounds interesting but I'm a bit skeptical. How does it handle state-specific S-Corp requirements? I have to deal with California's additional forms and their $800 minimum franchise tax.

15 It handles complex ownership structures really well. I've seen people use it with multiple shareholders and various income sources. The system analyzes your specific situation and customizes the guidance accordingly. It flags potential issues with foreign income reporting requirements that might affect your S-Corp status. For state-specific requirements, it actually has specialized knowledge about different state policies. It specifically mentioned California's $800 minimum franchise tax when I was using it and provided guidance on Form 100S requirements. The tool seems to understand both federal and state-level S-Corp compliance issues.

19 How exactly does this service work? Do they somehow have a secret number to the IRS or something? I've literally spent hours on hold and never get through.

20 I'm highly doubtful this actually works. The IRS phone lines are notoriously understaffed. If there was some magical way to skip the line, everyone would be using it. Sounds like a scam to me.

6 It's actually pretty straightforward - they use an automated system that navigates the IRS phone tree and waits on hold for you. When an actual IRS agent picks up, you get a call connecting you directly to them. No secret phone numbers or anything sketchy like that. The IRS lines are definitely understaffed, but the system basically waits on hold so you don't have to. I was skeptical too until I tried it. It's not about skipping the line - you're still in the same queue as everyone else, but you don't have to waste hours with your phone pressed to your ear.

17 Wait, non-US citizens can't be S-Corp shareholders? What about green card holders? My business partner just moved here from Canada and we were planning on making her a shareholder next year.

10 Green card holders (permanent residents) can be S-Corp shareholders, so your business partner from Canada would be eligible if they have a green card. The restriction applies to non-resident aliens who don't have permanent resident status in the US. The other eligible shareholders for S-Corps include US citizens, certain trusts, estates, and specific tax-exempt organizations. If your partner doesn't have a green card yet, you might want to consult with a tax professional about alternative structures or waiting until their residency status changes before adding them as a shareholder.

14 That doesn't sound right to me. There's no "maintenance" required for your S-Corp election. Once you've filed Form 2553 and been approved, the election stays in effect. Your accountant might be charging you for ensuring compliance with S-Corp requirements (like reasonable salary rules, separate accounting, etc.), but they should clearly explain what services that fee covers. I'd definitely ask for clarification on what specific work is being done for that $250.

I agree with the previous comment - there's no annual "maintenance" fee for S-Corp election status. That $250 charge sounds questionable. Your accountant might be bundling other S-Corp compliance services under that label, like monitoring your salary requirements (you need to pay yourself reasonable compensation), tracking shareholder basis, or ensuring you don't accidentally violate S-Corp rules. But they should definitely itemize what work justifies that annual fee. I'd ask for a detailed breakdown of what "S-Corp election maintenance" actually includes before paying it again.

That fee definitely sounds like it could be misleading. As others mentioned, the S-Corp election itself doesn't need annual maintenance. However, your accountant might legitimately be providing ongoing S-Corp compliance services like ensuring your payroll meets reasonable compensation requirements, monitoring shareholder basis calculations, or reviewing transactions to make sure they don't jeopardize your S-Corp status. The key is transparency - they should clearly explain what specific services justify that $250 annual charge. If they can't provide a detailed breakdown of the work being performed, I'd consider getting a second opinion from another tax professional.

I'd definitely push back on that fee. There's literally nothing to "maintain" with your S-Corp election - it's a permanent status until you voluntarily revoke it or violate the eligibility rules. Your accountant might be doing legitimate S-Corp related work like ensuring compliance with payroll tax requirements or reviewing your basis calculations, but calling it "election maintenance" is misleading at best. I'd ask for a detailed invoice showing exactly what services are provided for that $250. If they can't justify it with actual work performed, consider finding a new accountant. That kind of vague billing is a red flag in my experience.

I would definitely question that charge. The S-Corp election is a one-time filing that remains in effect indefinitely - there's no annual paperwork or filing required to "maintain" it. Your accountant might be providing legitimate ongoing services related to S-Corp compliance (like ensuring you meet reasonable salary requirements, tracking distributions vs. wages, or monitoring for events that could terminate your election), but they should be transparent about what work justifies that $250 fee. I'd request a detailed breakdown of the services included in that charge. If they can't provide specifics about actual work being performed, you might want to shop around for a new accountant who's more upfront about their billing practices.

Thank you for that helpful summary! As someone who's still navigating my first year as an S-Corp, I really appreciate the reminder about the reasonable salary requirement. I've been focused on the tax filing aspects but hadn't fully considered the payroll compliance side. Do you happen to know if there are any specific guidelines on what constitutes "reasonable" compensation, or is it more subjective based on industry standards and job duties?

Great question about reasonable salary! The IRS doesn't publish specific dollar amounts, but they do expect you to pay yourself what you'd pay someone else to do your job. They look at factors like your role in the company, hours worked, qualifications, and what similar positions pay in your area and industry. A good rule of thumb is to research salaries for comparable positions on sites like PayScale or Glassdoor. If you're doing the work of a $60k/year manager, you should probably be paying yourself somewhere in that ballpark as W-2 wages before taking additional money as distributions. The key is being able to justify your salary if the IRS ever questions it. Some S-Corp owners try to minimize payroll taxes by paying themselves very low salaries, but that's risky. The IRS has been cracking down on unreasonably low compensation because it reduces Social Security and Medicare tax revenue.