Common Tax Elections for Small Businesses:A) Default Classification. By default, the IRS treats a single-member LLC as a sole proprietorship, and a multi-member LLC as a partnership.B) Entity Classification Election. Use Form 8832 to elect for your LLC or partnership to be taxed as a corporation (C-Corp).C) S-Corporation Election. Use Form 2553 to elect S-Corp status — allowing income, losses, and credits to pass through to shareholders, avoiding double taxation.
Eligibility: To qualify for a tax election, your business must meet IRS criteria based on entity type and ownership structure:
LLC Eligibility Must already have an EIN Can elect to be taxed as: ● Sole proprietorship (default) ● Partnership (default for 2+ members) ● C-Corporation (Form 8832) ● S-Corporation (Form 2553) — must meet IRS shareholder limits
Corporation Eligibility Must have valid Articles of Incorporation For S-Corp election: ● No more than 100 shareholders ● Only U.S. citizens or residents ● Only one class of stock ● Not a bank, insurance, or foreign entity
Step-by-Step Guide:1) Review eligibility using:IRS S-Corp Overview - https://www.irs.gov/businesses/small-businesses-self-employed/s-corporations
2. Complete and sign: ● Form 8832 for C-Corp election - https://www.irs.gov/forms-pubs/about-form-8832● Form 2553 for S-Corp election - https://www.irs.gov/forms-pubs/about-form-2553 3) Include: ● EIN confirmation letter ● Owner/shareholder signatures 
4) File by mail to the IRS Service Center (listed in form instructions) 
5) Retain your IRS acknowledgment letter for your records  Form 8832 Instructions (PDF) - https://www.irs.gov/instructions/i8832Form 2553 Instructions (PDF) - https://www.irs.gov/instructions/i2553