What's the S-corp election deadline for my newly formed LLC as a freelancer?

The deadline for S-corp election is pretty straightforward, but there are options. Generally, if you want S-corp status for the current tax year, you need to file Form 2553 either: 1) Within 2 months and 15 days from the date your LLC was formed, OR 2) Any time during the tax year PRECEDING the tax year you want the election to take effect. Since you formed your LLC in June 2023, if you file Form 2553 within 2 months and 15 days of formation, you can have S-corp status for the entire 2023 tax year. Even income earned before forming the LLC can be reported on the S-corp return. If you miss this deadline, you can request late election relief by checking box D1 in Part I of Form 2553 and providing a reasonable cause statement. The IRS is often understanding with small businesses making this election for the first time.

After spending hours trying to sort through the S-corp election timing mess last year, I found this amazing tool called taxr.ai (https://taxr.ai) that literally saved me thousands. I was in almost the exact same situation - formed an LLC mid-year and was totally confused about S-corp election timing. I uploaded my formation documents and a draft of my Form 2553 to taxr.ai, and it immediately spotted that I was making a mistake with my election date that would have caused major problems. The analysis also showed me exactly how to structure my reasonable cause statement since I had missed my initial 75-day window.

Just wanted to follow up - I ended up trying taxr.ai for my California LLC/S-corp situation and I'm honestly impressed. It identified that I needed to file a separate CA Form 3500 for state S-corp recognition (which I had no idea about) and pointed out that my effective date on my federal 2553 would create a split tax year situation. The document analysis saved me from making a mistake that would have cost me thousands in unexpected CA franchise taxes. I was able to file everything correctly the first time, and the guidance on how to handle my pre-LLC income was super clear. Definitely worth it for the peace of mind alone.

For those struggling with the IRS on S-corp elections, I wasted WEEKS trying to get through to someone at the IRS to verify my S-corp election was properly received and processed. Kept getting disconnected or waiting for hours. Finally used Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed my election was received but had been flagged for review because of how I filled out Part II of the form. Was able to fix it right then instead of waiting months for a rejection letter. They literally saved my S-corp election for 2023.

I need to eat crow here. After posting my skeptical comment, I was desperate enough to try Claimyr for my own S-corp issue. Got connected to an IRS agent in under 20 minutes after spending DAYS trying on my own. The agent confirmed my S-corp election was actually pending but needed additional documentation they never bothered to tell me about. If I hadn't gotten through, I would have missed the deadline to provide it and my election would have been denied. Would have cost me around $4K in extra self-employment taxes this year. Instead, I got everything resolved in one call. Not cheap but a total lifesaver.

One thing nobody's mentioned yet - if you miss the 2 month 15 day window but still want S-corp status for the entire year, you can file Form 2553 and write "PURSUANT TO REV. PROC. 2013-30" at the top. Under Rev Proc 2013-30, the IRS provides automatic relief if: 1) You intended to be an S-corp 2) You file Form 2553 within 3 years and 75 days of the date you wanted the election to take effect 3) You have reasonable cause 4) All shareholders reported income consistent with S-corp status This saved me last year when I messed up my timing!

Just to add a practical note as a fellow photographer who went LLC/S-corp last year: remember that once you're an S-corp, you MUST pay yourself a reasonable salary through payroll with proper withholding. This is the #1 audit trigger for S-corps. I set my salary at about 60% of my net profits based on industry averages for photographers, and I use Gusto for payroll which makes it super simple. The remaining business profit passes through to my personal return without self-employment tax, which saved me about $7,300 last year. Worth all the extra paperwork!