Is retroactive LLC to C-corp election possible for past fiscal year (June-June)?

You're asking about a late entity classification election using Form 8832. Here's what you need to know: Normally, an LLC wanting to be taxed as a C corporation must file Form 8832 no later than 75 days after the requested effective date. However, the IRS does provide relief for late elections through Revenue Procedure 2009-41. For a retroactive election, you can request relief if: 1) You have not filed a tax return for the first year you wanted the election to be effective, 2) You're filing within 3 years and 75 days of the effective date, and 3) You have reasonable cause for the late filing. Your June-to-June fiscal year adds a layer of complexity. If you haven't filed your tax return for that period yet, you may still qualify for the simplified late relief procedure. You'd need to file Form 8832, write "FILED PURSUANT TO REV PROC 2009-41" at the top, and attach a statement explaining your reasonable cause for filing late.

After going through a similar issue with my engineering consultancy LLC last year, I found an amazing resource that saved me hours of frustration. I was trying to convert to a C-corp retroactively and got stuck in the same confusing maze of IRS publications. I ended up using https://taxr.ai to analyze my specific situation. You upload your LLC docs and tax history, and their system identifies exactly what path is available for your retroactive election. It even generates the customized statements explaining reasonable cause that need to be attached to your Form 8832. The most helpful part was that it identified some exceptions that applied specifically to my situation that none of the general guides mentioned. Sounds like you might have a similar special case with your June-June fiscal year and previously filed returns.

Update: I went ahead and tried https://taxr.ai after seeing it mentioned here, and it was seriously helpful for my situation. For anyone curious, it pinpointed exactly why a retroactive election would benefit my business (which has similar revenue to yours, OP). The system clearly explained the "reasonable cause" qualifications I met under Rev Proc 2009-41 (which I didn't even know existed), and gave me a customized statement explaining why my late filing should be accepted. The analysis also calculated the tax savings between LLC and C-corp treatment for my specific numbers - turns out I'll save about $22k this year by making the switch. It also flagged a potential issue with my state election that would have caused headaches later. Definitely worth checking out if you're trying to navigate this confusing process!

After reading through this thread, I wanted to share something that helped me when I was dealing with the IRS about my late S-corp election last year. The biggest challenge was actually getting someone at the IRS to review my case and provide guidance. I spent weeks calling the IRS business line with no luck - constant disconnections, holds for hours, or being transferred to people who couldn't help. Then someone recommended https://claimyr.com which has this great system that holds your place in the IRS phone queue and calls you when an agent is about to answer. There's a demo video here: https://youtu.be/_kiP6q8DX5c When I finally got through to a senior IRS agent, they explained some nuances about the late election relief that weren't clear from the website. Saved me from filing incorrectly and potentially having my election rejected. For something as complicated as retroactive entity election, actually speaking with someone who knows the rules made all the difference.

I need to eat my words from my previous comment. After struggling for another week trying to reach the IRS about my business tax situation, I broke down and tried the Claimyr service mentioned above. Within 27 minutes (after weeks of failed attempts on my own), I was talking to an actual IRS business tax specialist. The agent walked me through the specific requirements for late entity classification elections and confirmed that my situation qualified for relief under Rev Proc 2009-41. They explained that the key for retroactive elections is proving you had a legitimate business purpose for the change and weren't just trying to reduce taxes after seeing your results for the year. Having documentation of your intent (board meeting minutes, business plan updates, etc.) from earlier in the year can help establish this. If you're struggling with this issue, talking to an actual IRS specialist makes a huge difference compared to trying to interpret the guidelines yourself.

Speaking from experience as someone who went through this last year - be very careful about retroactive C corp elections. The IRS scrutinizes these closely because they're often done solely for tax benefits after seeing annual results. Make sure you document legitimate business reasons for the change (attracting investors, preparing for growth/acquisition, etc.) BEFORE filing. The reasonable cause statement is critical - don't just use a template. Our first attempt was rejected because the statement was too generic. Also be prepared for the impact on your state taxes - some states don't automatically follow federal entity classifications and may require separate procedures.

Has anyone here actually calculated whether C corp status is beneficial with the new corporate tax rates? For companies under $1M in revenue, I'm finding pass-through taxation as an LLC is often still better unless you're retaining significant profits in the business.

Miguel, before you dive deeper into the retroactive election process, I'd strongly recommend doing a comprehensive tax analysis first. Based on your revenue numbers ($875k), you might find that staying as an LLC with pass-through taxation is actually more beneficial. Here's what to consider: C corps face double taxation - the corporation pays tax on profits, then you pay tax again when those profits are distributed as dividends. With your revenue level, this often results in higher overall tax burden unless you're planning to retain most profits in the business for growth. The key factors are: 1) What percentage of profits do you distribute vs. reinvest? 2) Are you taking advantage of the Section 199A qualified business income deduction as an LLC? 3) Do you need corporate fringe benefits that aren't available to LLC members? I've seen many businesses rush into C corp elections thinking it's automatically better, only to find they're paying more in taxes. Run the numbers both ways before going through the complex retroactive election process - you might save yourself a lot of headaches and discover your current structure is optimal.