Fit Small Business: Get Your Business Into Shape! › Forums › Ask a Question › Hi – I am an LLC with 3 members. We filed form 2553 which I believe makes us an › Reply To: Hi – I am an LLC with 3 members. We filed form 2553 which I believe makes us an
Priyanka Prakash 1 year, 8 months ago
I’m not sure if I understand your question, but Form 8832 must be filed if you elect to be taxed as an C Corporation for federal tax purposes. While there are tax benefits to being a C Corp, there are also downsides, the primary one being double taxation. Profits are taxed at the company level, and dividends are taxed again at the shareholder level. There’s also more paperwork and regulation on C Corporations. That being said, it’s the primary structure chosen by businesses that plan to go public one day.
Other popular options for small businesses include LLCs and S Corporations. You can read more about these in our business structure guide. To be taxed as an S Corp for federal income tax purposes. you would need to file Form 2553. We also have a guide on S Corp tax filings. And of course, we recommend that you consult a business attorney and tax professional about your specific case.
Managing Editor, Fit Small Business