Entity choice & defaults — EA Part 2 Widgets

What this does

How to read it Visual: follow the highlighted path from formation → election → result.

Pick how you form the business and which elections you file. The flowchart shows the default tax classification and what changes if you elect C or S status.

Visual: follow the highlighted path from formation → election → result.

What are you forming?

Elections

File Form 8832 to elect association taxed as C corporation
File Form 2553 timely to elect S corporation (if eligible)

Classification path

Want the tax drag picture (SE vs S wages vs C double tax)? Open the entity tax drag compare study tool.

Exam trap: Default for multi-member LLC is partnership (not C corp). Single-member LLC defaults to disregarded entity. Corporation defaults to C corp — S status needs a valid timely 2553. EIN rules differ for disregarded vs partnerships/corps.

Entity tax drag compare ← All widgets Diagnostic home

Study tool only — not official IRS software. Figures labeled 2025 track law/forms through Dec 31, 2025. Confirm against current IRS pubs before the exam.