Sign South Dakota Profit Sharing Agreement Template Online

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well everybody agrees it is important to file taxes properly but what about irs form 8832 in this show i want to give you line by line instructions when it comes to filing irs form 8832 don't go anywhere [Music] welcome back folks to another edition of the awesome sweetie kiwi show how are you today i hope you are doing fantastic i'm doing marvelous if you ever ask me if you are doing as great as i am go grab a cup of coffee or tea or vodka let's roll in today's conversation i want to really cover irs form 8832 now this show has two sections first i'm going to cover the fundamentals of form 8832 i will explain to you what the form is and all the important things you need to know and then in section uh in the second session of this show i will talk about the specific instructions on how to fill and file the form now the irs has been audited 1000 they've been outed in thousands of taxpayers on form 8832 lately so for us it's kind of important to explain the fundamental concepts about the form 8832 that's why i'm making sure i'm taking time to explain what you need to understand having said that if you want just the line-by-line instructions you just want to skip the first section you just want to go straight to the second section form 8832 is a complex topic but after watching this show i promise you will understand everything let's just get right into it so what is form 8832 this is this form is used by a business to elect or change how it will be classified for federal tax purposes including as a corporation partnership or as a disregarded entity i'll talk about that later on let me give an example if you currently have an nlc but you prefer to be taxed as a c corporation you would fill out and submit form 832 it can also be used if your alc is currently being taxed as a corporation but you would rather be taxed as a partnership or sole provider so this form 8032 is used by llcs to elect how they wish to be taxed and remember though the llc's are created under state laws and not recognized as a type of entity for federal income taxes consequently llc owners must elect their entity type for federal income taxes and llc with one owner and those are known as a single member llcs they can choose between being taxed as a sole provider c corporation or s corporation llc with more than one owner and those are known as multi-member alc they can choose between being taxed as a partnership c corporation or s-corporation one thing i want to say here is that there are important tax differences between partnerships as corpse and c-corps because c-corps must pay taxes on their income at the copper level and so owners of c-corporation might also pay tax on their individual returns but only if the c corporation pays them a dividend partnerships and as corporations do not pay tax on their income rather all of their business income is included in the owner's personal return even if no cash was distributed to the owner it's very important to understand so the primary difference between partnerships and as corporations is that the income from a partnership is subject to self-employment tax where income from an ex-corporation is not all right now who's eligible to make an 88 32 election partnerships and both single member and multiple member lcs are eligible to file form 8832 now certain um certain foreign entities are eligible to file this form as well and llcs can also file form 8832 if they wish to revert back to a previous text classification one also one thing that you also need to understand is who must file form 8832 so you can an llc that elects to be treated as a c corporation must file 8832 a single member llc wishing to be treated as a sole provider or a multi-member llc wishing to be treated as a partnership does not have to file any form as because these are the default treatments so any llc wishing to be treated as a as an s corporation should file form 2553 okay 2553 instead of form 8832 if you are an alc and you wish to be treated as an s-corporation so right now if you look at the screen we have done a very nice summary for you a summary of llc choices and how they make the election you can see that on the screen right now for single members single member alc single member lc who wants to be treated as a c corp single member llc as an s corp so please take a look take 15 seconds to look at this uh this right now very important all right you can even uh take a screenshot or you can just take a note now choosing to how to be taxed has long term consequences and is one of the most important decision a limited liability company will ever make this is very important form idiot 32 can be found if um let's say an llc wants to change how they are taxed let me give you an example let's say an alc can elect to to change back from an s corporation or c operation to a partnership however changing from one type of entity to another after operations they have begun is usually a taxable event so really i i highly recommend you so enlist the help of a tax professional before choosing the tax status of your business they are important who is not eligible to file form 8832 sole proprietors so if you're a sole provider i want you to listen right now sole proprietors are not eligible to make an 8832 election so corporations are also generally not eligible to file with the exception of lcs that previously chose a corporate tax return and wish to change their classification and should you file form why should you file form 1832 now it's optional if you're happy with your current tax status guess what you will not need to file this form but the thing here is that in reality in practice many llcs can reduce their tax burden by changing the default tax status they were assigned when they were formed so if you and your accountant determine that it's financially advantageous to change your uh your default tax status filing uh a an 8832 gives you the option really of being taxed as a sole proprietor a partnership or a c corporation and what about the deadline because this is very important what the deal what about the deadline for filing from 8832 there is actually um the iris hasn't come up with any formal deadline so there is no formal deadline for filing a form 8832 but when you file it it can have implications on when your new tax classification kicks in let me give you an example your new classification cannot take effect more than 75 days prior to the date the election is filed or later than 12 months after filing according to the irs and let me just repeat that this is very important your new classification cannot take effect more than 75 days prior to the date of uh the date the election is filed or later than 12 months after filing according to the address and uh so if we were to give an example let's say that let's say you actually you follow the date of the election uh you file an election let's say uh january 30th so january 30th 75 days prior so 75 days prior so we have 30 days that's january uh december that's another another 60 days so we're going november 15 or november 16 right so it cannot take effect more than seven years it cannot take effect before november 15. all right so where should you file form 8832 now form 8832 cannot be filed electronically you cannot you cannot do it electronically so you have to mail you have to mail in the paperwork to the array so right so the if you want more info you can actually go on the iris website and look for instructions for form 8832 and they actually those instructions provide two different mailing addresses depending upon where the llc is located remember the alc an alc is a state legal formation but it has a federal it has a consequences at the federal fiscal level so we're showing you right now on the screen here please take a look and uh so and you can actually uh so if you are taxpayers in the states below you know where to mail the form to this address there are two addresses either in kansas city or ogden utah all right so please pay attention we're going to leave this on the screen right now so identify where your uh your llc is located and match the corresponding address where you need to send the form all right i'll be right back right after this don't go anywhere welcome back folks to another section of the awesome sort of kiwi show we are we're still having a conversation today about irs form 8832 i'm giving you a line by line instruction now i'm going to give you those instructions so form 8832 is a two page 11 question form from the iris so what you will need you need your business information including name employer identification number ein and address there are also several options to update your information including let's say if you've moved since applying for an ein or of filing your most recent return you need to check the address change box we're showing this to you right now all right and if you're qualified to file the classification late check the late classification relief saw on the revenue procedure 2009-41 box and if you are requesting late election relief check the rally for a late change of entity classification election sought on the revenue procedure 2010-32 box you can see those boxes on that we're showing this to you right now on the first on the screen the basic business information all right so the type of form 8832 requires some basic business info including business name address phone number ein already said that it could also be a text id uh the thing here is you need to have an ein folks because if you want to submit form 8832 you need to have an ein and the irs will not process the form if you leave the the field blank or input your social security number instead okay so now let's go with part one part one election information so line one you need to choose the type of election box one a check this if you are requesting an initial classification in box 1b check this if you are requesting a change in your classification very important so in part one question one you'll be asked to choose your reason for filling out form 8832 this is very important to sort of remember all right so line two eight indicators we're showing this through on right now on the screen you can see right now we have uh the box on the screen you can see you can follow with me all right line two indicate whether you have filed an election an entity election within the last 60 months if yes go to line two b if not go to line three line two b so you have to say yes check this if your prior election was an initial classification if yes box is checked folks you should go to line three i just said that if you know if you check the notebox you are not currently eligible to make an election the irs typically allows one change in your tax election every five years very important every five years so an exception is that as if the previous election was for a newly formed entity and the election was effective on the business day of formation and there is a second exception if more than 50 of the businesses ownership interest have changed since the previous election however it is very important to file a new form 8832 under this exception requires a private ladder rolling from the irs which requires a hefty user's fee along with professional fees to hire a tax attorney line three indicate whether there is more than one owner of your business so if yes you can elect to be classified as a partnership as a partnership or association that is taxable as a corporation if no you can elect to be classified as an association taxable as a corporation or you can choose to be disregarded as a separate entity so folks we're still showing you on the screen right now you will see on the screen what we're talking about here very very important all right and one thing one thing i also want to say here is that so line four you want to provide the name and ein of the single owner question three and question four actually um about owner information in question three you need to specify if the business has one owner or multiple orders if the business has only one owner you want to indicate the name of the owner in question four if the identify number usually means the owner's social security number if the owner is a business entity then the identifier number may be an ein line five you need to provide the name and ein of the parent corporation if owned by uh one or more affiliated corporations and if the owner or owners of the of your business are a group of affiliated company they're they follow consolidated return you'll need to specify the parent company and its ein in question five so this question is to ensure really that um each company in the group receives the correct tax treatment okay in line six you need to choose the type of entity you want to elect with options available for both domestic and foreign entities and this is really if you really think about this is the heart of formed 8832 folks this is where you elect how you want to be taxed so below i mean on the screen right now i'm going to show i'm going to give you a list of your choices along with a brief description of each so you want to choose a if your business was formed in the united states and you want to be taxed as a c corporation remember if you want to be taxed as an ass corporation you need to fill out form 2553 not form 8832 i already said that choose b if your business was formed in the us and you want to be taxed as a partnership choose see if your business was formed in the us and you want to be taxed as a sole proprietorship choose d if a business is a foreign entity and you want to be taxed as a sick operation choose if a company is um is a foreign entity and you want to be taxed as a partnership choose fav if a company is a foreign entity and you want to be taxed as a super partnership this is a very important decision with long-term task consequences folks that cannot be undone it cannot they cannot be undone so think about this carefully and i personally recommend talking to your accountant or tax professional before submitting the form remember as i said earlier you are limited to one change in text status every five years every five years so an error here can be costly so bottom line here is you want to be you want to be sure that the option you choose on your 8832 is the correct one line 7 here line 7 if you if a foreign entity is chosen you must provide the name of the foreign entity so you want to provide the country where the business was created if not the us and the thing is that is that some u.s territories are considered foreign entities for tax purposes so you need to look at go to form 8832 on page 8 so you can have a list of countries if you're not sure on line eight you want to indicate the the date you wish the election to become effective remember that date as i said earlier can can generally be no sooner than 75 days before you file from 88 32 and no later than 12 months after you filed from 8832 so if that date if the date field is left blank the irs will use the form submission date at the effective date in question 8 you choose you also need to pay attention to one thing online um line uh line nine and ten you need to put the name and telephone number for this question you need to provide the name title and phone number of the person that the average should contact should there be any questions about your form remember that the form 8832 should be signed by a business owner manager or officer of the business all right very important and the signature so you just complete and sign the consent statement with an authorized signature date and title and uh those authorized to sign the form 8832 include all current owners of the entity all right and one thing that i also want to mention here this is a very very important is that in question in uh on line eight you need to choose when you want your tax election to take effect and if you are let's say you are a new business then the effective date should be the date your business begin operations right an election effective after operation begin creates a complex tax scenario so you want to consult right now a tax professional and anytime i mention the word tax professional i'm talking about three professional categories either a uh an ea an enrolled agent a cpa a certified public accountant or a tax attorney now in between you can have an experienced tax accountant but if you're really looking for a like top of the top of you know some kind of quality you want to go for those designations physical attorney enroll agent ea or cpa now let's talk about part two the late election relief i mentioned that briefly earlier so form 8832 is due 75 days after the effective date so you may be eligible for a election relief if you meet the following criteria and the average is very uh is very adamant very thorough when uh checking whether or not a taxpayer meets the the this criteria so this is you need to meet the following criteria you have already submitted a form form8832 and were denied solely because it was filed late you are up to date on all your taxes there is a reasonable cause for the delay form 8832 is no more than three years late if this applies to you it does apply to you you want to explain the reasonable cause for delay in the blank space on the form on form 8832 and uh line 11. so explanation of why form 8832 was not filed on time an entity may be eligible for election relief in certain in certain um in certain circumstances now remember though that it's very important that the um to be eligible for that for to to to actually have the iris read the reasonable cause for delay that you wrote and actually uh give you grant you the relief you want you need to be clear in the in the blank space you need to be clear in your explanatory statement so one thing you need to really mention here is that make sure that you explain why your text you need to say that your tax deadline has not passed from for the current year's federal tax filing and you are currently up to date on all federal tax filings and i'm talking about not just at the company level but also at the personal level so you are up to date on all your taxes all right and and the thing here is that if your business meets the requirements you you need to make sure that you not only sign it you not only explain it but you need to sign the form and you need to actually keep a copy for yourself very important to to think about the paperwork here you need to keep a copy so that if the irs has to get back to you and ask more questions you're able to actually answer all the questions answer all the questions all right so this is really about it uh let me see okay this is about it folks i this was a short convo about form 8832 i was giving you line by line instructions and i actually also talked about just kind of give you a quick recap here the show was divided into two sections so the first section i showed you the fundamentals of form 8832 and the second section we spoke about line by line instructions for filing form 8832 so explained to you what is form 8832 who is eligible to make an an 1832 election who must file form 8832 who is not eligible to file formation 32 why should you file form 8832 what is the deadline for filing form 8832 and where should you file from 8832 with the understanding that you cannot e-file you cannot file electronically this form you can't do it thank you folks i will see you next time but until then remember stay marvelous you