What Is IRS Tax Form 8832 & Instructions | MN Tax Attorney Explains

Minnesota tax attorney Aaron Hall explains the purpose of IRS tax form 8832.


One of the primary purposes for IRS Tax Form 8832 is to elect to have a business taxed as an S Corp. An LLC, and a Corporation can be elected to be taxed as an S Corp. It does not change the organization you have at a state level. In other words, if you have an LLC, it will continue to be an LLC. If you have a corporation, it will continue to be a corporation. What IRS Form 8832 does is elects with the IRS to have the IRS recognize that business entity as an S Corp and reap those tax benefits. It recognizes, for example, that a corporation should be taxed as a pass through entity, not as as an entity taxed at the corporate level and then later at the individual owner level. With an LLC, tax form 8832 is used to elect to be taxed as an S Corp and reap the tax benefit regarding payroll tax that is not otherwise available to an LLC. If you have questions about this tax form, we recommend that you either work with a tax attorney, or with a CPA. It’s a simple form to fill out, but you want to make sure that you understand the impact of it before submitting it to the IRS because there are limits to how often you can change your tax election for your business.

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