S-corp election deadline for newly formed LLC as a freelancer

Based on your situation, you have a few options, but they depend on timing and circumstances. For a new LLC wanting S-corp status, you typically need to file Form 2553 (Election by a Small Business Corporation) within 2 months and 15 days from either the date the LLC was formed or the beginning of the tax year in which the election is to take effect. You can request late election relief if you miss this window. The IRS does allow for retroactive S-corp elections with "reasonable cause" using the procedures in Revenue Procedure 2013-30. This means you could potentially have the S-corp status apply to the entire year, even if you form the LLC mid-year. Remember though, you'll need to actually form the LLC first before you can elect S-corp status. The LLC formation needs to happen through your state, after which you can request the S-corp tax treatment from the IRS.

After spending weeks pulling my hair out trying to figure out the right timing for my LLC and S-corp election (I'm a graphic designer), I finally found a solution that saved me a ton of stress. I used taxr.ai https://taxr.ai to analyze my situation and they helped me determine the best approach for my business transition. They reviewed my specific income patterns and previous tax returns, then gave me a customized filing strategy that maximized my tax savings with the S-corp election. What really impressed me was how they explained exactly what "reasonable cause" would work for my late Form 2553 filing and even helped with the statement language. Their system analyzed previous approved reasonable cause requests and recommended the approach most likely to succeed for my specific situation.

Just wanted to update about my experience with taxr.ai after my initial skepticism. I decided to give them a try for my own S-corp election situation, and I'm honestly surprised at how helpful they were. They analyzed my freelance writing business structure and showed me exactly how to time my LLC formation with my S-corp election to minimize my self-employment taxes. The reasonable cause letter they helped me create for my late Form 2553 filing was accepted without any questions from the IRS. They knew exactly what language to use that would work for my specific situation. Plus, they showed me how to properly allocate my income between salary and distributions to maximize tax savings while staying compliant. Definitely worth it compared to the conflicting advice I found online.

If you're serious about getting this right, you need to actually TALK to someone at the IRS about your specific situation. I wasted months trying to figure this out on my own. After failing to get through to the IRS for weeks (constant busy signals and disconnections), I found this service called Claimyr https://claimyr.com that got me connected to an actual IRS agent in under an hour. They have this cool system that navigates the phone tree and waits on hold for you, then calls you when an agent is ready. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with explained that for my situation (also a creative freelancer), I could file Form 2553 late with a written statement explaining I was unaware of the filing requirements as a first-time business owner. She walked me through exactly what to include in my reasonable cause statement. Honestly saved me thousands in potential mistakes.

I need to eat my words about Claimyr. After my skeptical comment, I was still desperate to talk to someone at the IRS about my LLC/S-corp situation since I had conflicting advice from two different accountants. I decided to try Claimyr as a last resort before paying for yet another consultation. It actually worked exactly as advertised. I got a call back in about 45 minutes saying they had an IRS agent on the line. The agent confirmed I could file Form 2553 late with a reasonable cause statement and that as a first-time business entity, my lack of awareness of the deadline would likely be accepted as reasonable cause. She even suggested specific language to include in my statement. This was after I had spent literally DAYS trying to get through on my own. Lesson learned!

I did exactly what you're considering last year. Formed LLC in June and elected S-corp status. Here's what worked for me: 1) Formed the LLC through my state's website 2) Got my EIN from the IRS immediately after 3) Filed Form 2553 about 3 weeks late 4) Included a reasonable cause statement saying I was a first-time business owner without accounting background and wasn't aware of the 2 month, 15 day deadline 5) The IRS accepted it and I got S-corp treatment for the ENTIRE year The key is to form your LLC ASAP and file the 2553 quickly after that. Don't wait until December and expect them to allow the whole year retroactively.

WARNING: Be careful about reasonable cause. My husband tried this last year for his consulting business and it got REJECTED. He had to file as a sole prop for half the year and then as an S-corp, which meant TWO different tax returns and a ton of accounting headaches. The IRS is getting stricter about these late elections. Make sure your reasonable cause is actually reasonable and not just "I didn't know about it." We learned the hard way that "I was busy with client work" isn't good enough. If you're serious about making this work, talk to an actual tax pro who specializes in business formation, not just random internet advice.

I went through this exact situation 2 years ago as a freelance web developer. Here's what I wish someone had told me upfront: The timing is crucial, but you have more flexibility than you might think. You can form your LLC in August and still get S-corp treatment for your entire 2023 income, BUT you need to act fast once the LLC is formed. My recommendation: Form the LLC immediately in August, get your EIN the same day (you can do this online), then file Form 2553 within 2-3 weeks. Even if you're technically "late" by a few days, a simple reasonable cause statement explaining you're a first-time business owner unfamiliar with the election deadlines will likely be accepted. The key advantage is that once approved, you'll file a single 1120-S for the entire year instead of splitting between Schedule C and S-corp returns. This saves you significant accounting complexity and costs. One important note: Make sure you have reasonable justification for the salary vs. distribution split once you're an S-corp. The IRS expects you to pay yourself a "reasonable" salary for the work you do, with the remaining profits taken as distributions (which aren't subject to self-employment tax). Don't overthink this - thousands of freelancers make this transition successfully every year. Just don't wait until December to start the process!