Pennsylvania Sample Letter regarding Articles of Incorporation — Election of Sub-S Status [Your Name] [Your Address] [City, State, ZIP] [Email Address] [Phone Number] [Date] [Internal Revenue Service Center Address] [City, State, ZIP] Subject: Election of Subchapter S Corporation Status — Articles of Incorporation To Whom It May Concern, I, [Your Name], as the incorporated of [Company Name], am I writing to formally elect Subchapter S Corporation status for our corporation, in accordance with the Internal Revenue Code (IRC) section 1362(a). Enclosed with this letter are the necessary documents and information required to validate this election. 1. Incorporation Details: — Company Name: [Company Name— - Employer Identification Number (EIN): [EIN] — Date of Incorporation: [Date of Incorporation] — Principal Address: [Principal Address] 2. Decision to Elect Subchapter S Status: After careful consideration of our business objectives, taxation benefits, and eligibility criteria, it has been determined that electing Subchapter S Corporation status would be in the best interest of our company and shareholders. We believe this election will provide us with pass-through taxation benefits, allowing the corporation's income, deductions, credits, and losses to be passed directly to the shareholders for federal tax purposes. 3. Representation and Authorized Signatories: I, as the incorporated, am authorized to make this election on behalf of [Company Name]. The undersigned individuals affirm that they are duly authorized officers or members of the corporation, with the authority to sign this election letter under state law and the corporation's governing documents. 4. Required Documents: Enclosed herewith are the following documents, as required by the IRS: a) Completed Form 2553, Election by a Small Business Corporation b) Copy of the executed Articles of Incorporation c) Copy of the corporation's bylaws (if applicable) 5. Acknowledgment: By electing Subchapter S Corporation status, we understand and agree to comply with all the requirements and obligations set forth by the Internal Revenue Service (IRS). We acknowledge that this election is irrevocable without filing for a subsequent revocation with the IRS. Please review the enclosed documents and process our election promptly. If there are any additional forms or information required, kindly notify us at the contact information provided above. We appreciate your attention to this matter and prompt action. Thank you for your assistance in this matter. Sincerely, [Your Name] [Your Title — if applicable] [Company Name]
Pennsylvania Sample Letter regarding Articles of Incorporation - Election of Sub-S Status
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How to fill out Pennsylvania Sample Letter Regarding Articles Of Incorporation - Election Of Sub-S Status?
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A major reason for choosing S corp. taxation is to save money on self-employment taxes. If an LLC is taxed like a sole proprietorship or partnership, owners are self-employed, and they pay Social Security and Medicare taxes on all business profits, up to federal limits.
LLCs and S corps have much in common: Limited liability protection. The owners of LLCs and S corporations are not personally responsible for business debts and liabilities. Instead, the LLC or the S corp, as the owner of the business, is responsible for its debts and liabilities.
The main difference between an LLC and an S-corp is that an LLC is a type of business entity and an S-corp is a type of tax structure created by the IRS.
Owners of LLCs can allocate profits and losses disproportionately among owners; an S corporation's profits and losses must be allocated strictly based upon ownership percentage. If multiple LLC owners have different roles in the business, this could be especially beneficial.
Instructions for REV-976 Federal subchapter S corporations are no longer required to file the REV-1640, Pennsylvania S Corporation Election and Shareholders' Consent, in order to be granted Pennsylvania S corporation status.
In order to become an S corporation, the corporation must submit Form 2553, Election by a Small Business Corporation signed by all the shareholders. See the Instructions for Form 2553PDF for all required information and to determine where to file the form.
LLCs provide more flexibility than S Corps. For S Corps, there are pro-rata requirements for items of income, loss, or distributions. Conversely, owners of LLCs may specially allocate income, loss, and distributions within the parameters of the tax law.
The corporation will receive an acknowledgement if the S corporation election is accepted and when it will take effect. The corporation will also be notified if the election isn't accepted. If the notification of acceptance or nonacceptance is not received, the corporation should follow up by calling 800-829-4933.
