How to File Form 8832 ProSeries Tax: A Detailed Guide
Understanding how to file Form 8832 with ProSeries Tax software can be a crucial step for individuals or businesses looking to change their tax classification. This guide will walk you through the process, ensuring you’re well-prepared to navigate the complexities of this form.
What is Form 8832?
Form 8832, Entity Classification Election (1120S, 1120F, 1065), is used to elect how your business will be classified for tax purposes. By default, a business is classified as a disregarded entity, partnership, or S corporation. This form allows you to change your classification to a partnership, S corporation, or C corporation.
Eligibility and Timing
Before you begin, ensure that your business is eligible to file Form 8832. Generally, partnerships, S corporations, and C corporations can file this form. The election must be filed within 75 days after the beginning of the tax year for which the election is to take effect, or by the 15th day of the third month following the beginning of the tax year, whichever is later.
Step-by-Step Guide to Filing Form 8832 with ProSeries Tax
Follow these steps to file Form 8832 using ProSeries Tax software:
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Open ProSeries Tax software and log in to your account.
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Select the appropriate tax year for which you want to file the election.
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Choose the “Entity Classification Election” option from the menu.
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Enter the required information, such as your business name, address, and employer identification number (EIN).
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Select the type of classification you wish to elect (S corporation, partnership, or C corporation).
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Provide a description of the reasons for your election.
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Review the information you’ve entered to ensure accuracy.
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Submit the form and pay any applicable fees.
Required Information
When filing Form 8832, you’ll need to provide the following information:
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Business name and address
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EIN
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Details of the current classification
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Details of the new classification
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Reasons for the classification change
Table: Comparison of Entity Classifications
| Classification | Pass-Through Taxation | Double Taxation | Ownership Restrictions |
|---|---|---|---|
| S Corporation | Yes | No | 25 shareholders, must be U.S. citizens or residents |
| Partnership | Yes | No | No restrictions |
| C Corporation | No | Yes | No restrictions |
Common Mistakes to Avoid
When filing Form 8832, it’s important to avoid common mistakes:
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Missing information: Ensure you provide all required information to avoid delays or rejections.
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Incorrect classification: Double-check the classification you’re electing to ensure it aligns with your business needs.
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Deadlines: Be aware of the filing deadlines to avoid late penalties.
Seeking Professional Help
While filing Form 8832 with ProSeries Tax software is generally straightforward, it can be helpful to consult with a tax professional, especially if you’re unsure about the best classification for your business. A tax professional can provide personalized advice and ensure your form is filed correctly.
By following this guide, you
