Form 8832, also called the Entity Classification Election, allows eligible businesses to choose how the IRS taxes them. It is most commonly used by LLCs to select a tax status that fits their financial strategy.
When a business is created, the IRS assigns a default tax classification. Filing Form 8832 lets businesses switch that classification if another option is better for tax or legal purposes.
Why file Form 8832?
Businesses use Form 8832 to:
Elect corporate taxation: Some LLCs choose to be taxed as a corporation to benefit from corporate rates and deductions.
Elect partnership taxation: Others prefer pass-through taxation to avoid double taxation.
Change tax classification: Switching from a corporation to an LLC or vice versa is possible if business needs evolve.
Filing incorrectly or without guidance can have serious financial consequences, so consulting a tax professional is recommended.
When to file Form 8832
The filing timeframe depends on the business situation:
Business Type | Filing Window |
New businesses | Within 75 days before the effective date, which can be up to 12 months before or two months and 15 days after filing. |
Existing businesses | File by the tax return due date for the year the change should take effect, including extensions. |
Timely filing ensures the chosen tax classification applies for the intended period.
Where to mail Form 8832
Send Form 8832 to the IRS office based on your business location:
Location | Mailing Address |
CT, DE, IL, IN, KY, ME, MD, MA, MI, NH, NJ, NY, NC, OH, PA, RI, SC, VT, VA, WV, WI | IRS, Kansas City, MO 64999 |
All other U.S. states | IRS, Ogden, UT 84201 |
Foreign entities | IRS, Ogden, UT 84201 |
How to fill out Form 8832
Follow these steps to complete the form accurately:
Enter business details: Include your name, address, EIN, and formation date.
Select classification: Check corporation, partnership, or disregarded entity.
Set effective date: Ensure it is within the allowed timeframe.
Sign the form: A business owner, manager, or officer must sign.
Add representative info: Include details if a taxpayer representative is handling the filing.
Mail it: Send it to the correct IRS office.
Keep a copy: Retain for your records.
Accuracy is key. Double-check all entries before submitting to avoid delays or misclassification.
FAQs
Who can file Form 8832?
LLCs and other eligible entities that want to choose or change their tax classification.
Can a business change its tax classification more than once?
Yes, but there are IRS limits on how often an entity can switch classifications within a five-year period.
Do I need a tax professional to file?
It is highly recommended because filing incorrectly can lead to penalties or unwanted tax consequences.
Does filing Form 8832 affect state taxes?
Possibly. Some states have separate rules for tax classification, so check state requirements.
What happens after filing?
The IRS processes the election, and the business is taxed under the new classification starting from the effective date.
