Tax election definition
/What is a Tax Election?
A tax election is a choice made by a taxpayer among several possible options for how to deal with a situation from a tax reporting perspective. A tax election may have consequences related to the timing and amount of taxes paid.
Examples of Tax Elections
Here are several examples of tax elections that a taxpayer might make:
A business can elect to be taxed as a C corporation or an S corporation
A business can choose to keep its accounting records under the cash basis of accounting or the accrual basis
A married couple can choose to file tax returns separately or with a joint return.