The March 15 S-Corp Election Deadline:
What You Need to Know
If you want your LLC or corporation to be taxed as an S-Corp for the current tax year, you have until March 15 to file Form 2553. Miss it, and you're waiting another year — and potentially leaving $10,000–$30,000 in tax savings on the table.
Deadline: March 15 (for current tax year)
To elect S-Corp status effective January 1 of the current year, you must file Form 2553 by March 15. New businesses have until 75 days after formation.
What Is an S-Corp Election?
An S-Corp election is a tax designation — not a business structure. Your LLC or corporation remains legally unchanged. What changes is how the IRS taxes your business income.
Without an S-Corp election, a single-member LLC pays self-employment tax (15.3%) on 100% of net profit. With an S-Corp election, you split income between a "reasonable salary" (subject to payroll taxes) and a distribution (not subject to self-employment tax). On $150,000 of net profit, that difference can be $10,000–$20,000 per year.
The March 15 Deadline Explained
The IRS requires that Form 2553 (Election by a Small Business Corporation) be filed by the 15th day of the third month of the tax year for which the election is to be effective. For a calendar-year business, that's March 15.
If you miss March 15, you can still file — but the election won't be effective until the following tax year. That means another year of paying self-employment tax on your full net profit.
| Scenario | Deadline | Effective Date |
|---|---|---|
| Existing business, calendar year | March 15 | January 1 of current year |
| New business (formed this year) | 75 days after formation | Date of formation |
| Missed March 15 deadline | Next year's March 15 | January 1 of following year |
| Late election relief (Rev. Proc. 2013-30) | Up to 3 years 75 days late | Retroactive if qualifying |
Who Should Elect S-Corp Status?
The S-Corp election makes sense when the tax savings exceed the additional costs — primarily payroll administration and the requirement to pay yourself a reasonable salary. Here's a general framework:
Under $40,000 net profit
Skip it
The savings don't cover the overhead cost of running payroll and filing an additional tax return.
$40,000–$80,000 net profit
Evaluate carefully
Savings exist but may be modest. Run the numbers with your accountant before electing.
$80,000–$200,000 net profit
Strong candidate
This is the sweet spot. Most clients in this range save $8,000–$25,000 per year after overhead.
Over $200,000 net profit
Almost certainly yes
At this level, the S-Corp election is nearly always the right move. The question is salary level, not whether to elect.
How to File Form 2553
Form 2553 is a two-page IRS form. It requires basic business information, the names and signatures of all shareholders, and the tax year for which the election is effective. For most single-member LLCs, it's straightforward — but errors or missing information will cause the IRS to reject the election.
Common mistakes: wrong tax year, missing shareholder signatures, incorrect EIN, and filing with the wrong IRS service center. We recommend having a tax professional prepare and file Form 2553 to avoid these issues.
Steps to elect S-Corp status:
What Happens After the Election
Once your S-Corp election is effective, you'll need to: (1) run payroll for yourself at a reasonable salary, (2) file Form 1120-S (S-Corp tax return) in addition to your personal return, and (3) track distributions separately from salary. The additional compliance cost is typically $1,500–$3,000 per year — well worth it for most businesses above $80,000 in net profit.
Run the Numbers Before March 15
Use our LLC vs. S-Corp Calculator to see exactly how much you'd save — and whether the election makes sense for your specific situation.
Open the CalculatorFree Consultation
Not Sure If S-Corp Is Right for You?
We'll run your numbers and tell you exactly how much you'd save — and whether the election makes sense given your situation.
Schedule a CallKey Dates