Do-it-yourself Washington State S Corporation Kit
Okay, so here's something that may surprise you. Setting up an S Corporation in Washington State is easy. Surprisingly easy, in fact.
I'm going to provide clickable buttons you can use to download affordable do-it-yourself kits for setting up an S corporation in Washington state in a few paragraphs. But before I get to that, let walk you through the three simple steps you take...
Step One: Form an LLC or Corporation
Your first step for forming an S Corp in Washington state is to file either the Washington LLC formation or for-profit incorporation forms with the Secretary of State in Olympia to create an "eligible entity." (An eligible entity, by the way, is simply an entity that is allowed to make a Subchapter S election.)
The LLC formation and incorporation forms supplied (for free) by the Secretary of State's website are really simple. Mostly, the forms, both two pages in length, collect information like the name you want to use for the new entity and its address. No kidding, you can probably complete either form in less than 10 minutes. And once you have completed the forms, you fax them to the Secretary of State along with a check for the filing fee (about a couple of hundred bucks).
Note: The Washington Secretary of State also provides an online LLC formation or incorporation application, which costs slightly more but gives you nearly instant LLC formation or incorporation. Our DIY kits give you the details about using this alternative, faster approach.
Step Two: Obtain an Employer Identification Number
After your limited liability company or incorporation paperwork has been processed and accepted by the Secretary of State, you need to file an SS-4 form with the Internal Revenue Service to request a taxpayer identification number for the new LLC or corporation.
The SS-4 form is available for free download from the www.IRS.gov website. Note that this form is a bit more work to fill out the Washington State incorporation or LLC form because it collects quite a bit of information about what your new business or investment entity will be doing--including information about whether or not it will pay payroll. However, the IRS website does provide detailed instructions for the SS-4 form. (Note: If you've obtained EINs before you might also want to use the online EIN application process-which essentially walks you through the SS-4 form using an online wizard.
Step Three: Elect Subchapter S Status
After you get your EIN, you file another form with the Internal Revenue Service, a 2553, to make the election to have the LLC or corporation use the tax accounting rules specified in Subchapter S of the Internal Revenue Code. Once a corporation or LLC makes this election, people commonly refer to the entity as an S corporation. By the way, if you're thinking it's a little funny to call an LLC that's made an S election an "S corporation," you're right. It is funny. Probably, people should call them "S LLCs" or "Subchapter S LLCs."
If you feel confident completing these steps on your own, by all means get started. If you would like some extra help, as noted at top of the page, I've created two separate, free, downloadable do-it-yourself kits: one for S corporations that use an LLC-platform and one for S corporatinos that use a traditional "corporation" platform.
LLC-version of the Washington S Corporation Kit
If you want to use an LLC platform for your S corporation (and this is my general advice), purchase and download the "LLC version" of the Washington S corporation kit. It includes a 20+ page PDF document (an "ebook") that discusses and describes the benefits of creating an S corporation using a limited liability company and that steps you through the procedures needed to create a Washington state LLC, to get a federal tax identification number for your new LLC, and to elect to have your LLC treated (for federal and state income tax purposes) as an S Corporation. Predictably, the kit includes examples of completed state and federal forms so you know exactly what your setup documents should look like. And (because legally the entity is an LLC remember) the kit comes with two sample operating agreements, one for single member LLCs and one for multiple member LLCs.Purchase and Download
Corporation-version of the Washington S Corporation Kit
You can also set up a traditional corporation and then make the Subchapter S election to have the corporation treated for income tax purposes as an S corporation. This option may be the right choice when you want to be a corporation for credibility or "branding" reasons. For example, if you want to use the name "corporation" or the acronym "inc" in your business name, you would form a regular corporation and not a limited liability company. (A limited liability company will typically use the acronym "LLC" in its name--and some people don't like that.)
If you do want to use a corporation platform for your S corporation, purchase and download the "Corporation version" of the Washington S corporation kit. It includes a 35 page PDF document (again, an "ebook") that discusses and describes the benefits of creating an S corporation using a regular, traditional corporation. Specifically, this version's ebook also provides step-by-step instructions for incorporating your active trade or business in Washington, for getting a federal tax identification number for your new corporation so you can start banking and other financial activities, and for electing to have your corporation treated for federal and state income tax as an S Corporation so you can maximize your tax savings. The regular-corporation version of the Washington state S corporation kit includes sample corporate bylaws, which you or your attorney can edit to create your own, personalized bylaws.
By the way, after reading the kit document, you may decide to skip the Subchapter S election and leave your corporation taxed as a regular corporation, or C corporation. C corporations do deliver some unique tax benefits to their owners, as discussed in the kit.Purchase and Download
Additional Information You May Find Useful
If you want additional information about how to maximize the tax savings related to running a business or investment venture, you may also be interested in one of our downloadable e-books (see descriptions below). Each book covers a category of tax planning topics that easily save a business owner significant amounts of income or self-employment taxes (potentially thousands of dollars a year) and is instantly downloadable.
Often the best tax saving tool private companies have? The Section 199A deduction which allows them to avoid taxes on the last 20 percent of their income.Read More
Using an S corporation for your business? To maximize savings, you need to minimize the salary paid to shareholders. But this decision is tricky.Read More
Nearly secret, the federal government's employee retention credits provide tremendous payroll tax savings for most small businesses... A new book from our firm explains.Info here