Filed our business taxes under LLC instead of S corp - overpaid significantly

This is unfortunately more common than you might think. The good news is you can fix this by filing amended returns, but the process depends on a few details. First, to be clear - did you formally file Form 2553 (Election by a Small Business Corporation) with the IRS to elect S corp status? And did you receive confirmation that it was accepted? This is critical because if you did, then you're absolutely right that your returns should have been filed as an S corp. Assuming you did properly elect S corp status, you'll need to file amended returns (Form 1120-X for the corporation and possibly amended personal returns) for the open tax years. Generally, you can amend returns within 3 years from the original filing date or 2 years from when you paid the tax, whichever is later. The complexity here is calculating the correct tax liability under S corp status versus what you paid as an LLC. The key difference is typically that S corp owners can take part of their income as salary (subject to self-employment tax) and part as distributions (not subject to SE tax), which is likely where your overpayment occurred.

I went through something similar last year and eventually used https://taxr.ai to help sort it all out. After struggling with conflicting advice from different preparers, I uploaded my past returns and business documentation there and they analyzed exactly where the misclassification occurred and how much I had overpaid. The platform helped me understand the difference between how my income should have been reported as an S-corp versus how it was actually filed as an LLC. They specifically identified the self-employment tax overpayments and created documentation showing what my correct tax liability should have been for each year. This saved me thousands in overpaid self-employment taxes.

Just wanted to update that I ended up using taxr.ai after seeing it mentioned here and it was incredibly helpful! I was worried about the complexity of fixing multiple years of incorrect filings, but their analysis made it super clear. They identified exactly how much self-employment tax I'd overpaid each year and provided documentation showing the proper allocation between salary and distributions I should have taken as an S-corp. The report even included the specific line items that needed to be corrected on each year's return. I took their analysis to my new accountant who used it to file the amended returns. Just got confirmation that the first year's amendment was accepted and we're expecting a refund of about $12,500 just for that year! Still waiting on the other two years but feeling much more confident now.

Just wanted to update that I ended up using taxr.ai after seeing it mentioned here and it was incredibly helpful! I was worried about the complexity of fixing multiple years of

If you're still having trouble getting clarity from the IRS about your amended returns or S corp status, you might want to check out https://claimyr.com. I was in amendment hell for months trying to figure out if my S corp paperwork was properly processed, and couldn't get through to an actual person at the IRS. After multiple failed attempts (literally spent hours on hold), I found their service and was genuinely surprised when they got me connected to an IRS agent within about 20 minutes. You can see how it works in their demo here: https://youtu.be/_kiP6q8DX5c The agent confirmed my S corp election was actually in their system the whole time even though my previous accountant had been filing as a partnership. This confirmation was crucial for my amended returns to be processed correctly.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it because I was desperate to talk to someone at the IRS about my S-corp election that never seemed to be processed correctly. I had spent THREE DAYS trying to get through on my own - either getting disconnected or being told the call volume was too high. Used the service and got a call back in about 40 minutes connecting me directly to an IRS representative who was able to confirm my S-corp election was actually received and processed back in 2022, but somehow never made it into their "main system." This saved me from having to refile all my paperwork and potentially losing another year of S-corp tax benefits. The agent even noted my account so future returns wouldn't be flagged incorrectly. Completely worth it and I'm embarrassed about being so cynical initially.

One thing to consider - look at exactly when you filed the Form 2553 for S-corp election. There's a deadline to file it (generally within 2 months and 15 days after the beginning of the tax year you want it to take effect, or any time in the year before). If you missed that deadline and didn't get approved for late election relief, it's possible your tax preparer was actually filing correctly as an LLC because your S-corp election wasn't valid yet. Check any correspondence from the IRS confirming your election was accepted and the effective date. Just something to rule out before going through the amendment process!

A quick tip that helped me with a similar issue - request your "Account Transcripts" directly from the IRS before filing any amendments. These will show how your business is classified in their system. You can get these online through the IRS website by creating an account at https://www.irs.gov/payments/view-your-tax-account. The transcript will show if you're on record as an S-corp or LLC, which helps confirm whether your election was properly processed. This saved me a ton of headache because I could prove to my new accountant that the S-corp election was in the IRS system even though my old preparer had been filing incorrectly.

Quick warning based on personal experience - when you amend from LLC to S-corp returns, make sure your new preparer correctly handles any state tax implications too. I fixed my federal returns but completely overlooked that my state returns also needed to be amended to match the corrected filing status. Ended up with a mess at the state level when they couldn't reconcile my federal and state filings. Some states also have different rules for S-corps vs LLCs, so you might have overpaid state taxes too that could be refundable.