Setting up an LLC taxed as S Corp - EIN application challenges?

I recently formed a multi-member LLC with my business partner, and we want to elect S Corporation tax treatment by filing Form 2553 with the IRS. The problem is that Form 2553 requires an EIN first, but I'm hitting a roadblock when trying to apply for an EIN online. When I tried to create an EIN with S Corp structure through the IRS website, it wouldn't let me proceed because I have "LLC" in my company's legal name. Now I'm confused about the proper sequence - should I apply for the EIN as an LLC first and then change it later? Or should I omit the "LLC" from the name when applying? Maybe use our DBA name instead? Some resources I've read suggest that changing entity types later would require a new EIN altogether, which sounds like a headache. I'd really appreciate some guidance on the most efficient way to handle this situation. What's the proper order of operations for an LLC that wants S Corp tax treatment? Thanks in advance for any help!

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22 comments

Eleanor Foster

•8M

You're running into a common confusion point in the entity formation process. Let me clarify the correct approach: When you form an LLC, that's your legal entity type under state law. The S Corporation is not a legal entity type but a federal tax classification. So the proper sequence is: 1. Form your LLC at the state level (which you've done) 2. Apply for an EIN as an LLC (using your full legal name including "LLC") 3. File Form 2553 to elect S Corp tax treatment When applying for the EIN, you should select "Limited Liability Company" as your entity type, not "S Corporation." The EIN application is about your legal structure, not your tax treatment. After you receive your EIN, then you file Form 2553 to elect S Corp tax treatment for your LLC. You don't need to change your name or get a new EIN later. An LLC taxed as an S Corp keeps its original EIN throughout.

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Eleanor Foster

•8M

You're absolutely right to be concerned about timing. The 2-month and 15-day deadline is important for getting S Corp treatment for the current tax year. The good news is that the EIN process is usually very quick - if you apply online, you'll typically receive your EIN immediately upon completion of the application. Once you have your EIN, you should file Form 2553 right away. Make sure all members/shareholders sign it. If you're close to the deadline, consider faxing the form and keeping the confirmation. You can also apply for late election relief if you miss the deadline, but it's best to file on time if possible.

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Kai Rivera

•8M

Just wanted to share my experience with this exact situation. I also struggled with the EIN application for my LLC that I wanted taxed as an S Corp. After going in circles on the IRS website, I found this service called taxr.ai (https://taxr.ai) that guided me through the proper sequence. The platform cleared up my confusion by explaining that I needed to apply for the EIN as an LLC first, then file the S Corp election. They have this document analyzer tool that reviewed my Articles of Organization and Operating Agreement, then provided step-by-step instructions specific to my situation. Saved me from making errors that would have cost me time and potentially created tax complications. They also provided templates for the Form 2553 with explanations for each section, which made the process much less intimidating.

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Kai Rivera

•8M

They provided detailed guidance on completing the forms correctly and explained exactly how to submit them. While they don't submit them on your behalf, they review everything before you send it to ensure it's accurate. The document analyzer was especially helpful because it flagged issues specific to my state's LLC requirements that could have caused problems later. Their platform costs less than an hour with most accountants, and I found it more thorough than my previous experiences with the IRS helpline. The value was in getting clear, step-by-step instructions tailored to my specific situation rather than generic advice. Plus having all the resources and explanations in one place saved me tons of research time.

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Layla Sanders

•8M

Wanted to follow up about my experience with taxr.ai that I was skeptical about earlier. I ended up trying it for my LLC/S-Corp situation and was honestly impressed. The document analyzer identified an issue with my Operating Agreement that would have caused problems with my S Corp election - something about disproportionate distributions that would have disqualified me. The step-by-step EIN application guide made the process super clear - applied as an LLC first, got my EIN immediately, then used their Form 2553 walkthrough. Got confirmation from the IRS three weeks later that my S Corp election was accepted. Now I understand why the IRS website was confusing me - I was approaching it in the wrong order. For anyone else struggling with this, definitely get your EIN as an LLC first before doing anything with S Corp election.

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Morgan Washington

•8M

If you're struggling with getting through to the IRS to ask questions about this EIN/S Corp issue, try Claimyr (https://claimyr.com). I wasted two full days trying to get through to an IRS representative to clarify this exact situation before discovering this service. They got me connected to an actual IRS agent in about 25 minutes when I had been trying unsuccessfully for days. The IRS agent confirmed exactly what others have said here - apply for EIN as LLC first, then file Form 2553 for S Corp treatment. There's a video demo showing how it works here: https://youtu.be/_kiP6q8DX5c After getting definitive answers from the IRS directly, I was able to proceed with confidence instead of second-guessing everything I read online.

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Morgan Washington

•8M

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Oliver Alexander

•8M

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Lara Woods

•8M

Just to add another data point - we recently went through this process for our marketing agency LLC. Here's what worked for us: 1. Applied for EIN as a multi-member LLC (used our full legal name including "LLC") 2. Received EIN instantly through online application 3. Filed Form 2553 within the 2-month, 15-day window 4. Received confirmation letter about 6 weeks later One tip: when filling out Form 2553, we initially made the mistake of using an inconsistent tax year. Make sure you select the right tax year (calendar vs. fiscal) and stick with it. We had to resubmit because of this error.

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Lara Woods

•8M

In our state (Michigan), we didn't need to file any additional forms specifically related to the S Corp election. The S Corp election is strictly a federal tax treatment and doesn't change our state-level entity status as an LLC. However, some states do require S Corporations to file additional forms or pay different taxes, so it's definitely worth checking with your state's department of revenue or a local tax professional. For example, in California, S Corps pay a minimum franchise tax that's different from LLC fees. Each state has its own rules about how they treat federally-elected S Corps.

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Carmen Ortiz

•5M

I went through this exact same process about 6 months ago and can confirm what others have said - the sequence is crucial. I made the mistake of overthinking it initially and got stuck in analysis paralysis. Here's what I learned from my experience: 1. The IRS EIN application system is designed around legal entity types, not tax elections. So when you see "LLC" vs "S Corporation" options, they're asking about your legal structure, not your tax treatment. 2. Apply for your EIN using "Limited Liability Company" and your full legal name including "LLC". Don't try to work around the system by omitting "LLC" or using a DBA - this could create complications later. 3. The online EIN application really does give you the number immediately in most cases. I was surprised by how fast it was. 4. File Form 2553 as soon as you get your EIN. Don't wait - the 2 month 15 day deadline is firm, and while there's late election relief available, it's better to just file on time. One thing I wish I'd known: make sure your LLC Operating Agreement doesn't have any provisions that would disqualify you from S Corp treatment (like disproportionate distributions or more than 100 members). It's worth reviewing this before you file the election. The whole process took me less than a week once I understood the proper sequence. Good luck with your application!

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Lena Kowalski

•2M

This is incredibly helpful, thank you! I'm actually in the middle of this process right now and was getting overwhelmed by all the conflicting information I found online. Your point about the Operating Agreement is especially valuable - I hadn't even thought to check if there were provisions that could disqualify the S Corp election. Quick question: when you mention "disproportionate distributions," what exactly should I be looking for in my Operating Agreement? My business partner and I have equal ownership (50/50), but I want to make sure there's nothing hidden in the language that could cause issues. Also, did you have to notify your state at all about the S Corp election, or was it purely a federal filing?

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Raul Neal

•15d

Great question about disproportionate distributions! In your Operating Agreement, look for any language that allows profits or losses to be allocated differently from ownership percentages. For example, if you and your partner both own 50%, but the agreement says one partner gets 60% of profits in certain situations, that would disqualify S Corp status. Also watch out for clauses about "preferred returns" or different classes of membership interests with varying rights. S Corps can only have one class of stock, so your LLC needs to mirror that - equal rights to distributions and liquidation proceeds based on ownership percentage. As for state notification, it was purely federal in my case (I'm in Texas). The S Corp election is just a tax treatment choice with the IRS - your LLC remains an LLC under state law. However, some states do have different tax implications for S Corps, so it's worth checking with your state's revenue department or a local CPA to understand any state-level tax changes. Since you have 50/50 ownership, you're likely fine as long as your Operating Agreement doesn't have any special allocation provisions. Most standard LLC agreements for equal partners are S Corp compliant, but definitely worth having someone review it before filing Form 2553.

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Kristin Frank

•8d

I just went through this exact process last month and wanted to share what worked for me since I see a lot of great advice here but also some confusion in the comments. The key insight that finally clicked for me: the EIN application asks about your LEGAL entity structure, while Form 2553 is about your TAX election. These are completely separate things, which is why the IRS website seems confusing when you're trying to do both at once. Here's exactly what I did: 1. Applied online for EIN selecting "Limited Liability Company" - used our full legal name including "LLC" 2. Got the EIN instantly (literally took 10 minutes total) 3. Downloaded Form 2553 from IRS website 4. Had both LLC members sign it 5. Mailed it certified mail the next day One thing I'll add to what others have said: make sure you understand the "reasonable compensation" requirements once your S Corp election is effective. As an S Corp, you'll need to pay yourself a reasonable salary (subject to payroll taxes) before taking distributions. This is something to budget for since it affects your cash flow. The whole thing was much simpler than I expected once I stopped overthinking it. The IRS systems actually work pretty well when you follow the proper sequence!

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