What federal income tax forms do I file if I own an S-Corporation?

If you want to use 2010 IRS tax forms to file as an S-Corporation, make sure your business qualifies as one. There are several criteria you must meet.

–         Must have elected to be taxed as a corporation.

–         Must only have one class of stock.

–         Cannot have more than 100 shareholders.

–         Profits and losses are allocated to shareholders depending on how much stock they own.

If all these are met, then you are considered an S-Corporation. This means your business doesn’t pay federal taxes. Instead, individual stockholders are taxed. This is why it’s important the profits and losses are allocated correctly. This type of taxation is called single taxation.

If any of these conditions are broken, such as by gaining too many shareholders, you must file as a C-Corporation.

Forms Needed

Since your shareholders are filing the profits and losses for themselves, they need specific tax forms. Namely, form 2553. These 2010 IRS tax forms are known as ‘Election by a Small Business Corporation.’

These 2553 tax forms must be filled out and signed by every single shareholder. If they live in a community property state, their spouses must fill out these 2010 IRS tax forms as well.

Your business must also fill out 2010 IRS tax forms 2553. This form requires you to fill out the name of your business and other information about it. This includes the date you elected to become an S-Corporation. Generally, the IRS requires you to have elected before the middle of March. However, they are usually lenient on late elections.

You also need to list each shareholder’s name and address. This is so the IRS can make sure each one filled out the tax forms. Remember, if there are over 100 shareholders, you can’t file as an S-Corporation.

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