What is Form 8832? Entity Classification Election Guide

Published on February 04, 2026

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Form 8832 is a US tax form that lets certain business entities choose how they are classified for federal tax purposes, such as electing to be taxed as a corporation instead of using the default rules.

Form 8832: How does the entity classification election work?

You choose a tax classification (for example, corporation instead of the default LLC treatment), pick an effective date, file Form 8832, and from that date onward, the IRS applies the new classification.

All of this is separate from your regular tax filing responsibilities from the US. You can read more about it here (https://www.expatustax.com/2025-us-expat-tax-guide/).

Which businesses can file Form 8832 (LLCs, partnerships, corporations, and foreign entities)?

The IRS has default rules for entity classification, but Form 8832 lets certain businesses override those defaults and pick a different federal tax treatment. Not every entity can do this, but many US and foreign structures can.

What does the IRS mean by an “eligible entity”?

An eligible entity is a business that is not locked into being treated as a corporation under US tax rules. If it is eligible, it can usually choose between being taxed as:

A corporation
A partnership (if it has more than one owner)
A disregarded entity (if it has a single owner)

Entities that are often eligible include:

Most US LLCs
Many domestic and foreign partnerships
Certain foreign companies that are not on the IRS “per se corporation” list

Entities that are not eligible include:

Regular US C corporations
S corporations
Trusts and estates

The first step in using Form 8832 is confirming that your business is in the “eligible” bucket.

How does Form 8832 work for US LLCs?

For US LLCs, the default IRS classification depends on how many members the LLC has:

A single-member LLC is, by default, a disregarded entity. Its income goes directly on the owner’s tax return.
A multi-member LLC is, by default, a partnership and files Form 1065.

Using Form 8832, both single-member and multi-member LLCs can elect to be taxed as corporations instead of using these defaults.

Can partnerships use Form 8832 to change their classification?

Yes, many domestic partnerships are also eligible entities. By default, a domestic partnership is taxed as a partnership. It can choose to remain that way or file Form 8832 to elect corporate treatment.

This can be relevant for:

Partnerships with owners living in different countries
Joint ventures where the partners prefer a corporate structure for US tax reasons

Electing corporate status may simplify some aspects of reporting but can also change how money is taxed when it is distributed, so it is not a decision to rush.

Can corporations use Form 8832?

This is more limited.

A standard domestic C corporation is automatically treated as a corporation and generally cannot use Form 8832 to turn itself into a partnership or disregarded entity.
Once an eligible entity elects to be taxed as a corporation on Form 8832, it is usually locked into that choice for at least 60 months unless a narrow exception applies.

In most cases, Form 8832 is used to move into corporate treatment, not to escape from it.

How does Form 8832 apply to foreign entities?

For foreign entities, the IRS has a separate framework. Foreign businesses fall into two groups:

Per se corporations
- These are always treated as corporations and cannot change classification with Form 8832.
Eligible foreign entities
- These can choose their classification using Form 8832, similar to US LLCs.

If a foreign entity is eligible, it can usually elect to be treated as:

A corporation
A partnership (if there is more than one owner)
A disregarded entity (if there is a single owner)

Which businesses clearly cannot use Form 8832?

Some structures are outside the scope of what Form 8832 is meant to handle. These include:

Trusts and estates, which follow their own set of rules
Domestic C corporations, which are fixed as corporations by default
S corporations, which use Form 2553 and separate procedures for their election

If your entity already fits one of these fixed categories, Form 8832 is not available as a way to change how it is taxed.

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Form 8832 vs default IRS classification: should I change how my business is taxed?

If you never file Form 8832, the IRS uses default rules to classify your entity, and the form only matters if you want to override those defaults.

How does the IRS classify my business if I never file Form 8832?

Here is the basic layout of the default rules:

Single-member US LLC (one owner)
- Default: treated as a disregarded entity.
- The income and expenses go directly on the owner’s tax return, usually on Schedule C, E, or F.
Multi-member US LLC
- Default: treated as a partnership.
- It files Form 1065 and issues Schedule K-1S to the members.
Domestic partnership (non-LLC)
- Default: treated as a partnership.
Standard US corporation formed under state law
- Default: treated as a C corporation.
- It files Form 1120 and pays corporate income tax.

If you never touch Form 8832, these defaults simply apply. The form is there only if you want to change how your eligible entity is taxed, usually to corporate status.

When is it better to keep the default classification?

Keeping the default often makes sense when you want:

Flow through taxation, where profits and losses show up on the owners’ personal tax returns.
Fewer layers of tax. There is no separate corporate tax before the money reaches you.
Simpler administration, especially if your business is small or just starting.

When might it help to elect corporate treatment on Form 8832?

Electing corporate status with Form 8832 can be useful in some setups, such as:

You want to separate personal and business taxation more clearly.
The business plans to retain earnings rather than distribute most of the profit each year.
A corporate structure works better with foreign tax rules or a tax treaty in your country of residence.

When do I file Form 8832, and how does the election timing affect my tax bill?

Timing is a big part of using Form 8832 correctly. The form does not just say how your entity will be taxed. It also sets when that new treatment starts, and that timing can change which years are affected and how the IRS views certain transactions.

When can I file Form 8832 for a new entity?

If you have just formed a new entity, you generally have two main choices:

File Form 8832 shortly after formation and choose an effective date within 75 days before the filing date. That lets you apply the elected status from the start.
File later and choose an effective date that is still within the allowed window, or up to 12 months in the future.

For a new US LLC, filing early usually means the entity is treated consistently for the entire first tax year, instead of having part of the year under the default rules and part under the elected classification.

How does the effective date on Form 8832 actually work?

Form 8832 includes a line where you set the effective date of the election. That date is important because it controls when the new classification begins.

As a general rule:

You can set an effective date up to 75 days before the date you file Form 8832.
You can set an effective date up to 12 months after the date you file, if you want to plan ahead.

If you file the form on June 1, for example, you might choose:

An effective date in mid-March (within 75 days before filing), or
A date later in the year, such as July 1 or January 1 of the following year.

If you do not pick a valid date, the IRS uses default timing rules, which may not match what you had in mind.

Form 8832 pitfalls: late elections, common mistakes, and how to fix classification errors

The most common problem is a late election.

Form 8832 has a 75-day rule. Your chosen effective date usually cannot be more than 75 days before the date you file the form. If you file outside that window but assume the new classification applies from the start of the year, you can end up with:

The IRS still treating your entity under the default classification
Tax returns filed as if the election already existed
A mismatch that may require amended returns or a late election request

For example, you might think your LLC has been taxed as a corporation for the full year, but in the IRS system, it is still a disregarded entity because the Form 8832 was filed too late.

What other common mistakes happen with Form 8832?

Here are issues that come up again and again:

Missing or invalid effective date
- Leaving the date blank or picking a date outside the allowed range can cause the election to start later than you thought.
Using the wrong form for your goal
- Some taxpayers file Form 8832 when they actually want an S corporation election, which should be done on Form 2553. The result is not what they expected.
Ignoring the 60-month rule
- Once an entity elects corporate status using Form 8832, it generally cannot change its classification again for 60 months. People sometimes try to switch back too soon.
Forgetting about deemed transactions
- Moving from disregarded or partnership status to corporate status can be treated as if you contributed assets to a new corporation. If there is built-in gain, that can have tax effects.
Not matching US classification with foreign treatment
- As a US expat, your country of residence may treat the entity differently. A change using Form 8832 without checking the foreign side can lead to double tax or reporting conflicts.