Question for Maryland Tax Preparer

[Naveen Mohan from New York]

Hello:

I am based in New York. I have a client who has a single member LLC. I need to convert it to a LLC electing to be taxes as a sub chapter s corporation.

I know for Federal I have to file form 8832 and form 2553 bit I do not know what I am supposed to filed Maryland.

I did a search on my ATX MAX but it is not returning any form for Maryland for this purpose.

Thanks for your help.

Naveen Mohan

[Lion EA]

For Federal, the LLC files only Form 2553 to make the election to be taxed as an S-corporation.

[Naveen Mohan from New York]

Lion:

This LLC was taxed before as Schedule C. Are you saying that a disregarded entity does not have to file form 8832? prior to doing form 2553?

[Guest Taxed]

I don't think there is any harm if you file both forms. You are covering all your bases.

[MDEA]

In MD there is nothing to file.It works off the Federal.Have you been filing MD personal property tax form and paying the $300 each year?

[Lion EA]

He's already organized as an entity with his secretary of state, right? So, just the 2553 to elect to be taxed as an S-corporation.

If he wants to incorporate, then he has new paperwork with his SoS and with the feds, but that wasn't what you were asking.

General Instructions

A corporation or other entity eligible to elect to be treated as a corporation must use Form 2553 to make an election under section 1362(a) to be an S corporation. An entity eligible to elect to be treated as a corporation that meets certain tests discussed below will be treated as a corporation as of the effective date of the S corporation election and does not need to file Form 8832, Classification Election.

[Mr. Pencil]

I do not know what I am supposed to filed Maryland.

Why not check with Maryland itself? I know Maryland has at least one form that pass-through entities must file.

As always, I strongly recommend getting local legal advice for the specific state before choosing a form of entity (which is pretty close to practicing law). Serve the client professionally, pocket a referral fee for a one-minute phone call, and move on to the next task.

[Richcpaman]

Naveen:

If the entity has been in existence for a year or longer,

You file the 8832 with the IRS to go from Sole-Prop to Corp.

Then the 2553 to get to S-Corp with the IRS.

In Maryland, you just continue to file the Maryland Personal Property Report and pay the $300.

Doesn't matter, (YET!) to Maryland if you are disregarded entity or Corp. (Used to, but not anymore)

Rich

[Lion EA]

No. Read the instructions to Form 2553.