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An eligible entity uses Form 8832 to elect how it will be classified for federal tax purposes, as: A corporation. A partnership. An entity disregarded as separate from its owner.
What is a 8832 tax form?
Tax form 8832 is typically used by partnerships or Limited Liability Companies (LLCs) to choose or change their tax classification. In technical terms, Form 8832 lets taxpayers elect to classify or reclassify their entity structure from one type to another.
Should I file 8832 for my LLC?
Do I have to file Form 8832? No, this is an optional form that is filed if you would like your LLC to be taxed as a corporation. After it is filed, your LLC will file a corporate tax return and be subject to corporate tax rates.
What happens if you don't file form 8832?
Businesses that don't fill out Form 8832 will receive a default tax classification, which could affect how much tax they pay. Changing a tax election status using Form 8832 may save a business thousands of dollars per year in taxes.
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