Form 8832 is titled “Entity Classification Election” and is filed by eligible business entities to elect their classification for federal tax purposes. The primary purpose of Form 8832 is to allow certain business entities, such as limited liability companies (LLCs), to choose how they want to be taxed.
By default, the Internal Revenue Service (IRS) assigns a tax classification to newly formed business entities based on their structure. But, entities eligible to file Form 8832 have the option to choose a different tax classification that may be more advantageous for their particular circumstances.
Why file Form 8832
Some common reasons for filing Form 8832 include:
- Electing to be taxed as a corporation: Certain entities, such as LLCs, may choose to be taxed as a corporation to take advantage of corporate tax rates and benefits.
- Electing to be taxed as a partnership: Other entities may choose to be taxed as a partnership to pass through income and deductions directly to their owners, avoiding double taxation.
- Changing tax classification: Existing entities may use Form 8832 to change their tax classification, such as converting from a corporation to an LLC or vice versa.
It’s important to note that filing Form 8832 requires careful consideration of the entity’s tax implications, and it may have significant legal and financial consequences. Businesses should consult a qualified tax professional or legal advisor before making an entity classification election using Form 8832.
When to file Form 8832?
Form 8832, the Entity Classification Election, is typically filed by eligible business entities to elect their classification for federal tax purposes. The timing of when to file Form 8832 depends on the situation:
- Initial election: For a newly formed business entity, Form 8832 must generally be filed no more than 75 days before the effective date of the election. The effective date can be no more than 12 months before or two months and 15 days after the election is filed. If a newly formed entity wants to choose its tax classification, it must file Form 8832 within this timeframe.
- Late election or change: If an existing business entity wants to make a late election or change its tax classification, it must generally file Form 8832 by the due date of the entity’s tax return for the year it wants the election to be effective. This typically means filing by the due date, including extensions, of the tax return for the effective year of the election.
Businesses should carefully consider the implications of their entity classification election and file Form 8832 within the appropriate timeframe to ensure compliance with IRS regulations.
Where to mail Form 8832?
Form 8832 should be mailed to the appropriate IRS address based on the business entity’s location. For domestic entities, the form should be mailed to the address provided in the instructions for Form 8832:
| State | Connecticut, Delaware, District of Columbia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, West Virginia, Wisconsin | Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washington, Wyoming |
| Mailing Address | Department of the TreasuryInternal Revenue ServiceKansas City, MO 64999 | Department of the TreasuryInternal Revenue ServiceOgden, UT 84201 |
Foreign entities should send it to the Ogden, UT office.
How to fill out Form 8832?
Filling out Form 8832 involves several steps. Here’s a general overview of how to fill out the form:
- Provide entity information: Enter the name, address, Employer Identification Number (EIN), and the date you established the entity at the top of the form.
- Select classification: Indicate the desired tax classification for the entity by checking the appropriate box. Options include corporation, partnership, or disregarded entity.
- Effective date of election: Specify the effective date of the election. It can be no more than 75 days before the filing date, up to 12 months before, or two months and 15 days after the filing date.
- Signature: The form must be signed by an authorized person, such as a member, manager, or officer of the entity.
- Additional information: Provide additional required information, such as the taxpayer’s representative, if applicable.
- Date and mail the form: You can sign and date the form, once it’s complete. Then mail it to the appropriate address based on the entity’s location (domestic or foreign).
- Keep a copy: Retain a copy of the completed Form 8832 for your records.