How to retroactively make my LLC an S-Corp and amend previous years taxes?

This is a situation where the details really matter, but I can help clarify. Yes, you can generally amend returns within 3 years of the original filing date (or 2 years from when you paid the tax, whichever is later). However, retroactively electing S-Corp status is a bit more nuanced. The "3 years and 75 days" rule you might be referring to is actually related to late S-Corp elections. If you missed the deadline to elect S-Corp status (which is typically 2 months and 15 days after the beginning of the tax year you want the status to take effect), the IRS allows for late elections under certain conditions. What you're looking for is called a "late entity classification election" using Form 8832, potentially combined with a late S election using Form 2553. The IRS Revenue Procedure 2013-30 provides relief for late S-Corp elections if you meet certain criteria. You'll need to demonstrate you had "reasonable cause" for not making the election timely. That said, you cannot simply amend a return and declare yourself an S-Corp retroactively without going through these specific procedures. The process is more involved than just filing an amended return.

After struggling with a somewhat similar situation last year, I discovered this amazing service called taxr.ai (https://taxr.ai) that completely saved me when dealing with complex business tax amendments. I had missed an S-Corp election deadline and was trying to figure out if I could fix it retroactively. I uploaded my previous returns and business formation documents to taxr.ai, and their AI analyzed everything and provided me with a detailed report showing exactly which IRS revenue procedures applied to my situation. They even generated a draft of the "reasonable cause" statement I needed for my late election request. The best part was that they pointed out several deductions I could take as an S-Corp that I hadn't even considered. Honestly worth checking out if you're dealing with something this complicated.

Just wanted to follow up on my earlier question about taxr.ai. I decided to try it after reading about it here, and I'm actually really impressed. I was worried it would be too automated, but the analysis they provided was incredibly detailed and specific to my situation. I uploaded my 2022 and 2023 tax returns along with my LLC formation documents, and they identified exactly which IRS revenue procedures applied to my situation (it was Rev. Proc. 2013-30, as someone mentioned above). They even generated the customized reasonable cause statement I needed for the late S election that specifically addressed my business circumstances. The report they gave me had direct citations to the tax code which I took to my CPA, and she said it saved her several hours of research. If you're considering a retroactive S-Corp election, it's definitely worth checking out.

If you're still struggling to get answers about your tax situation and S-Corp election options, I'd recommend using Claimyr (https://claimyr.com) to get through to the IRS directly. I was in a similar position last year, spending hours on hold trying to clarify my options for a retroactive entity election. Claimyr got me through to a real IRS agent in about 15 minutes when I had previously spent 3+ hours on hold before giving up. You can see how it works in this quick video: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed that I was eligible for the late election relief and walked me through exactly what forms I needed to submit. Having that direct confirmation from the IRS gave me the confidence to proceed, and ultimately I got my late S-Corp election approved and saved about $15k in self-employment taxes.

I need to admit I was completely wrong about Claimyr. After posting my skeptical comment earlier, I decided to give it a try since I was desperate to ask the IRS about my own late S election options. What happened next genuinely surprised me. About 20 minutes after signing up, I got a call connecting me with an actual IRS agent who specializes in business entities. I explained my situation about wanting to retroactively elect S-Corp status, and she confirmed that under Revenue Procedure 2013-30, I could request relief for a late election. She even explained that I needed to demonstrate a "reasonable cause" for filing late and gave me specific examples of what they typically accept. The conversation saved me tons of research time and potential mistakes. For anyone dealing with complex tax amendments or entity status changes, being able to speak directly with the IRS and get official guidance is invaluable. I've literally never gotten through to them before despite dozens of attempts.

Another option worth considering is filing Form 4868 to get an extension for the current year while you sort out your prior year issues. My business partner and I went through a similar situation when converting from an LLC to S-Corp retroactively. The specific section of the tax code you want to look at is 26 USC § 1362(b)(5) which provides relief for late S corporation elections. And as others mentioned, Revenue Procedure 2013-30 lays out the specific requirements. Just be aware that you'll need to show that your failure to elect S-Corp status in a timely manner was due to reasonable cause. In our case, we had emails showing we intended to make the election but our previous accountant dropped the ball. Documentation is key here.

I went through this exact process last year. Here's what I learned from the experience: 1) The "3 years and 70 days" timeframe your friend mentioned is probably referencing a combination of the standard 3-year amendment period plus the 75-day late election relief period in Rev. Proc. 2013-30. 2) You CAN'T simply file an amended return to change from LLC to S-Corp. You need to: - File Form 8832 to be treated as a corporation first - Then file Form 2553 for S election - THEN amend your return once those are accepted 3) The reasonable cause statement is critical. Mine explained that I was unaware of the tax benefits of S-Corp status until my business grew significantly, and that I would have elected it initially had I been properly advised. 4) Have patience! My process took about 5 months from submission to getting confirmation that both elections were accepted retroactively.

This is exactly the type of situation where getting professional help early can save you thousands. I went through a similar conversion process two years ago and learned some hard lessons. First, the timeframe your networking contact mentioned is partially correct but oversimplified. The general rule for amending returns is 3 years from the filing date OR 2 years from when you paid the tax, whichever is later. However, for late S-Corp elections, you're looking at Revenue Procedure 2013-30, which has its own specific requirements and deadlines. The key thing to understand is that you can't just amend your 2022 return to be treated as an S-Corp without first getting approval for a late entity classification election. The IRS needs to accept your late election before you can file amended returns reflecting that status. Here's what worked for me: I documented everything showing my intent to minimize taxes legally (meeting minutes, emails with advisors, business projections), then filed both Form 8832 and Form 2553 with detailed reasonable cause statements. The whole process took about 6 months, but I ultimately saved over $18k in self-employment taxes. One critical point - make sure your new CPA has experience with late elections. Not all tax professionals are familiar with these procedures, and the paperwork needs to be perfect or you'll face delays or rejections.

I've been following this thread with great interest since I'm dealing with a very similar situation. My single-member LLC had unexpected growth in 2022, and like you, I got hit with a substantial tax bill that could have been significantly reduced with S-Corp treatment. Based on everything I've researched and the excellent advice shared here, the key points seem to be: 1) This IS possible under Revenue Procedure 2013-30, but it's not as simple as just filing an amended return 2) You need BOTH Form 8832 (entity classification election) AND Form 2553 (S election) 3) The "reasonable cause" statement is absolutely critical - document everything showing you intended to minimize taxes legally 4) Timeline matters - you generally have 3 years from filing date or 2 years from payment date to amend I'm curious though - for those who've successfully gone through this process, how did you handle the self-employment tax aspect? One of the biggest advantages of S-Corp status is avoiding SE tax on distributions, but I'm wondering if the IRS scrutinizes reasonable salary amounts more closely when you're making a retroactive election. Also, did anyone run into issues with state tax authorities? My state (California) has its own S-Corp election requirements, and I'm not sure if they automatically follow the federal late election or if I need to file separate state forms. Thanks to everyone who's shared their experiences - this thread has been incredibly valuable!

I've been through a similar situation and want to add a few practical considerations that might help with your decision-making process. While the technical aspects have been well covered here (Rev. Proc. 2013-30, Forms 8832 and 2553, reasonable cause statements), there are some financial realities to consider before diving in: 1) **Professional fees can add up quickly** - Between CPA fees for the complex filings, potential attorney consultation, and ongoing S-Corp compliance costs (payroll processing, additional tax returns), you could easily spend $5,000-$10,000 in the first year alone. Make sure your potential tax savings justify these costs. 2) **Payroll complexity** - If your retroactive election is approved, you'll need to establish reasonable compensation for 2022 and handle the payroll tax implications. This often means setting up payroll systems retroactively and potentially owing additional employment taxes that weren't previously required as an LLC. 3) **State compliance varies wildly** - Some states make this process relatively straightforward, while others (looking at you, California and New York) have their own complex requirements that don't always align with federal elections. 4) **Documentation timeline** - Start gathering your supporting documentation now. Business bank statements showing consistent profitability, any communications about business growth or tax planning, and records of when you first learned about S-Corp benefits will all strengthen your reasonable cause argument. The tax savings can definitely be worth it (I saved about $22k over two years), but go in with realistic expectations about the complexity and costs involved. It's not a magic bullet, but it can be a valuable strategy if executed properly.