To be eligible for S Corp classification, you must file an election by March 15th of the year you want the election to be effective. The election must be approved before you can file an S Corp tax return. This means that you cannot wait until the next tax filing season to make the election.
For example, if you want your business to be treated as an S Corporation starting January 2023, then you must file the election by March 15, 2023. You will not be able to file an S Corp tax return in 2023 for the 2022 tax year but will have to wait until the following year and only if the IRS approves your election.
The IRS does allow some businesses to submit a late election with an explanation for why they missed the deadline; however, there is no guarantee that the IRS will approve the late election. Thus, if you are filing a late election, never file an S Corp tax return until that late election has been approved. Instead request an extension of time to file.
Have questions about transitioning your business to an S Corp? Give us a call at (612) 440-3988 to schedule a free consultation.