The Arizona Election of 'S' Corporation Status and Instructions — IRS 2553 provides businesses with the opportunity to elect S Corporation status for tax purposes. This election allows eligible corporations to avoid double taxation by allowing income, deductions, and credits to flow through to shareholders. To qualify for S Corporation status in Arizona, a corporation must meet specific requirements set by the Internal Revenue Service (IRS). These include having no more than 100 shareholders, all of whom must be individuals, certain types of trusts, or certain tax-exempt organizations. Additionally, all shareholders must be U.S. citizens or residents. By electing S Corporation status, the corporation's income is not taxed at the corporate level. Instead, it is reported on the shareholders' individual tax returns. This can result in significant tax savings for small businesses. The IRS Form 2553 is used to make the election and must be filed within a specific timeframe. Failure to file the form on time may result in the corporation being treated as a C Corporation, subjecting it to double taxation. Different types of Arizona Election of 'S' Corporation Status and Instructions — IRS 2553 may include: 1. Initial Election: This type of election is filed by a newly formed corporation that wishes to be treated as an S Corporation from the beginning of its existence. 2. Late Election: In cases where a corporation has already been in existence and failed to elect S Corporation status within the required timeframe, a late election can be filed. However, there are specific reasons and criteria that must be met for the IRS to accept a late election. 3. Termination of Election: Sometimes, a corporation may decide to revoke it's S Corporation status and revert to being taxed as a C Corporation. In such cases, the Termination of Election form must be filed with the IRS. The Arizona Election of 'S' Corporation Status and Instructions — IRS 2553 provides detailed guidance on how to complete the form accurately and when to file it. It is recommended for corporations seeking to elect S Corporation status to consult with a tax professional or an attorney for guidance to ensure compliance with the IRS regulations. By electing S Corporation status, businesses in Arizona can benefit from potential tax savings, increased flexibility in distributing profits to shareholders, and better protection from personal liability. It is essential for businesses considering this election to carefully review the instructions provided in the IRS 2553 form and seek professional advice to ensure compliance with all requirements.