Start-up tax planning and corporate compliance: the 2026 guide
The choices you make in the first weeks, the entity, the elections and the registrations, shape your taxes for years. Some have short deadlines that cannot be fixed later. Here is the plain-English path, with Illinois specifics.
Prepared by Prem Tax and Accounting Corp. Last checked against official sources on October 9, 2026.
Start here: six steps
Choose the structure
Sole proprietorship, LLC, S corporation or C corporation. It decides your liability, your tax, and whether investors and QSBS are possible. See choosing an entity.
Form it and get your EIN
File with the Illinois Secretary of State, appoint a registered agent, and get a free EIN from the IRS. Never pay a website for an EIN.
File the elections on time
S election (Form 2553), Section 83(b), entity classification. These have short deadlines. See elections and deadlines.
Register for payroll and sales tax
Register with the Illinois Department of Revenue and the Illinois Department of Employment Security before your first paycheck or sale.
Set up books and a bank account
A separate account and card, a chart of accounts, and monthly reconciliations from day one.
Plan the first-year taxes
Start-up costs, equipment, research, owner pay and estimated payments. See start-up tax benefits.
2026 numbers at a glance
The deadlines that cannot be fixed
| What | Deadline | Late fix? |
|---|---|---|
| Section 83(b) election on restricted stock | Within 30 days of the transfer | No |
| S corporation election (Form 2553) | Within 2 months and 15 days of the start of the tax year | Yes: late election relief within 3 years and 75 days, with reasonable cause |
| Entity classification (Form 8832) | Effective up to 75 days before filing and up to 12 months after | Relief may be available |
| Payroll registration | Before the first paycheck | Penalties for late deposits |
Mistakes we see
- Missing the 83(b) deadline, then paying tax on stock value as it vests.
- Electing S corporation status too early, with no profit to justify the cost, or too late and paying tax at the wrong rate.
- Mixing personal and business money from the start.
- Forgetting the Illinois annual report and the registered agent requirement.
- Issuing stock without thinking about QSBS, vesting and the tax on a future sale.
- Hiring staff before payroll registrations are in place.
The guide, page by page
Choosing an entity
LLC, S corporation or C corporation, side by side.
Read →Elections and deadlines
S election, 83(b), entity classification and late relief.
Read →Start-up tax benefits
QSBS, research expensing and credits, and start-up costs.
Read →First-year compliance checklist
Illinois registrations, filings and a first-year timeline.
Read →S corporation savings calculator
Estimate the payroll tax an S election could save.
Read →Existing startup checklist
Our longer checklist of elections, payroll and tax treatment.
Read →Common questions
What is the first deadline a new company can miss?
If you receive stock that vests over time, the Section 83(b) election is due within 30 days of the transfer and cannot be fixed later. For an S corporation, the election on Form 2553 is due within 2 months and 15 days after the start of the tax year the election is to take effect. Late relief exists for the S election, but not for 83(b).
Do I need an S corporation?
Not automatically. An S election often makes sense once profit is comfortably above a reasonable salary for the owner, because profit above salary is not subject to self-employment tax. It has extra costs and rules, and foreign owners cannot be S corporation shareholders. Try the savings calculator and then ask us.
Do I have to file a beneficial ownership (BOI) report?
Not for a company formed in the United States. FinCEN's final rule, effective August 14, 2026, exempts U.S. companies and U.S. persons. Foreign companies registered to do business in the U.S. still report their foreign owners.
Do I need a registered agent in Illinois?
Yes. Every Illinois LLC and corporation must keep a registered agent with an Illinois address, either an Illinois resident or an entity authorized to do business in Illinois.
Can I deduct what I spent before opening?
Up to $5,000 of start-up costs and up to $5,000 of organizational costs can be deducted in the first year, each reduced dollar for dollar once the costs pass $50,000. The rest is deducted over 180 months (15 years), starting when the business opens.
Can a foreign person own a U.S. company?
Yes. A foreign owner can own an LLC or a C corporation, but not an S corporation. Extra forms apply, such as Form 5472. See our page on starting a U.S. business from abroad.
Official sources
- IRS: Instructions for Form 2553 (S corporation election)
- IRS: Apply for an EIN online (free)
- IRS Publication 583: Starting a business and keeping records
- FinCEN: beneficial ownership information (BOI)
Let's talk about your taxes, your business, your plans.
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