Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.
Thank you for your question, and thanks for using JustAnswer.com. Unfortunately, it is too late at this point to organize your business as an S Corporation for the 2012 tax year.
You can only elect S Corp status in a tax year before the year of the change becoming effective, or no later than the 15th day of the third month following the end of your tax year. This means that for 2012 the latest you could have elected S status was March 15.
For next year, file form
2553 with the IRS
by March 15th so that during 2013 you don't run into the same tax issues. CLICK HERE
for that form.
However, there is relief from this rule. To qualify for a late S election the following must apply: The corporation meets the S-Corporation eligibility criteria, The corporation intended to be classified as an S-Corporation as of the intended effective date of the S-Corporation election, The corporation failed to qualify as an S-Corporation only because it did not file Form 2553 on time, Less than 24 months have passed since the original due date
of Form 2553, The corporation either has reasonable cause or inadvertently failed to file Form 2553 on time, The corporation has not yet filed tax returns
for the first tax year for which it intended to file as an S-Corporation, or the corporation has filed its first tax return
using Form 1120S and the shareholders
properly reported their share of income
in a manner consistent with the corporation's intention to be an S-Corporation, Form 2553 is filed not later than 6 months after the due date (without regard to extensions
) of the first tax return for which the corporation intended to file as an S-Corporation, and Shareholders and other taxpayers have not reported their income
in a manner inconsistent with the corporation's intention to file as an S-Corporation.If the company meets these requirements, then company should file IRS Form 2553 by writing at the very top of the form the following words: "FILED PURSUANT TO REV. PROC. 2003-43" So, you can file a late election. Please let me know if I can be of any additional assistance. Have a very Happy New Year and thanks for using JustAnswer.com.
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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.