The Role of Form 8832 in Business Taxation
Form 8832 is an IRS form that businesses use to change their income tax structure. It allows businesses to determine which tax structure they are subject to, such as C corporation, S corporation, or partnership. Depending on the business’ operations, filing this form can provide relief from double taxation or generate tax savings. With the form, a business must make an election to how it is taxed in the eyes of the IRS, which serves as the legal basis for the filing of other relevant forms.
Step-by-Step Instructions for Filing Form 8832
Businesses in America must comply with the IRS’ tax regulations and complete IRS Form 8832 to change their tax structure. Here’s a step-by-step guide to completing this form:
- Step 1: Choose a Federal Tax Classification for Your Business
- Step 2: Gather Necessary Documentation
- Step 3: Completion of the Form 8832
- Step 4: Submit the Form 8832 to the IRS
- Step 5: Retain a Copy of the Form 8832 For Future Reference
The Consequences of Incorrectly Filing Form 8832
Filing Form 8832 incorrectly or not filing it at all can have serious consequences. The IRS may deny the business the in section it claimed for taxation, resulting in double taxation because IRS taxes are calculated differently for different entities. The business could also receive penalties and fees for incorrect filing or late filing.