What each business structure costs a year, state by state
Federal and state income tax, Social Security and Medicare, state franchise taxes and filing fees, added up for five structures. 2026 rates, every figure linked to its source.
$3,739 a year
saved by switching from a sole proprietorship to an LLC taxed as an S corp in California, at these numbers.
Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $57,500 of profit, with the same settings. Setting up costs $70 once in state filing fees. As an LLC taxed as an S corp this uses the state's pass-through entity tax election, which lowers the cost here.
California, 2026: $100,000 profit, single filer
| Item | Sole prop | LLC as S corp | Change |
|---|---|---|---|
| Yearly cost | $26,916 | $23,177 | −$3,739 |
Itemized: 9 lines
| Item | Sole prop | LLC as S corp | Change |
|---|---|---|---|
| Self-employment taxirs.gov, 2026 rates | $14,130 | $0 | −$14,130 |
| Federal income taxirs.gov, 2026 rates | $8,235 | $8,593 | +$358 |
| State income taxftb.ca.gov, checked Oct 23, 2026 | $4,551 | $0 | −$4,551 |
| Statement of Information (Form LLC-12)sos.ca.gov, checked Oct 23, 2026 | $0 | $10 | +$10 |
| Payroll tax on your salaryirs.gov, 2026 rates | $0 | $6,407 | +$6,407 |
| State disability and paid leaveedd.ca.gov, checked Oct 23, 2026 | $0 | $520 | +$520 |
| Payroll service and tax return (estimate) | $0 | $1,800 | +$1,800 |
| California S corporation tax (1.5%)ftb.ca.gov, checked Oct 23, 2026 | $0 | $823 | +$823 |
| California pass-through entity tax, paid by the company (elected)ftb.ca.gov, checked Oct 23, 2026 | $0 | $5,024 | +$5,024 |
| Yearly cost | $26,916 | $23,177 | −$3,739 |
Full calculator for CaliforniaAll five structures in California
At these numbers switching saves under $1,000 a year, so there is nothing for an accountant to act on. Your current structure is about as cheap as it gets in California.
Want an accountant to look at it? It's free
On your numbers the cheapest structure is another one, at a year less than the one you have now. Leave your name and email and a vetted accountant in California can go over it with your real books. You pay nothing for that first talk.
Every structure in every state, by saving
Yearly cost of each structure at $100,000 of profit, single filer. The cheapest in each state is green, ties included, and the saving is from a sole proprietorship to it. The state you picked comes first, then the largest saving.
| # | State | Sole prop yours | LLC | LLC as S corp | S corp | C corp | Saving a year |
|---|---|---|---|---|---|---|---|
| 44 | California selected | $26,916 | $27,409 | $23,177 | $23,188 | $32,215 | $3,739 |
| 1 | South Carolina | $25,459 | $25,459 | $19,628 | $19,628 | $29,413 | $5,831 |
| 2 | Nebraska | $25,890 | $25,899 | $20,911 | $20,910 | $29,738 | $4,980 |
| 3 | Virginia | $26,895 | $26,926 | $21,920 | $21,920 | $31,173 | $4,975 |
| 4 | Alabama | $26,747 | $26,747 | $21,803 | $21,803 | $31,270 | $4,944 |
| 5 | Mississippi | $25,350 | $25,350 | $20,422 | $20,442 | $29,284 | $4,928 |
| 6 | Missouri | $25,796 | $25,796 | $20,875 | $20,890 | $29,500 | $4,921 |
| 7 | Kansas | $26,751 | $26,780 | $21,835 | $21,835 | $30,485 | $4,916 |
| 8 | New Mexico | $25,588 | $25,588 | $20,698 | $20,709 | $30,036 | $4,890 |
| 9 | Louisiana | $24,768 | $24,791 | $19,890 | $19,890 | $28,408 | $4,878 |
| 10 | Georgia | $26,254 | $26,292 | $21,391 | $21,391 | $30,318 | $4,863 |
| 11 | West Virginia | $25,732 | $25,748 | $20,874 | $20,874 | $30,348 | $4,858 |
| 12 | Michigan | $26,064 | $26,080 | $21,219 | $21,219 | $30,538 | $4,845 |
| 13 | Idaho | $26,182 | $26,182 | $21,383 | $21,383 | $30,370 | $4,799 |
| 14 | Arizona | $24,295 | $24,295 | $19,498 | $19,535 | $28,555 | $4,797 |
| 15 | Arkansas | $25,632 | $25,730 | $20,848 | $20,848 | $29,442 | $4,784 |
| 16 | Oklahoma | $26,002 | $26,018 | $21,242 | $21,223 | $29,815 | $4,779 |
| 17 | Iowa | $25,285 | $25,294 | $20,515 | $20,527 | $29,619 | $4,770 |
| 18 | Montana | $26,255 | $26,255 | $21,491 | $21,491 | $30,955 | $4,764 |
| 19 | Indiana | $25,077 | $25,087 | $20,323 | $20,323 | $29,315 | $4,754 |
| 20 | Kentucky | $25,500 | $25,510 | $20,770 | $20,770 | $29,759 | $4,730 |
| 21 | Utah | $26,501 | $26,512 | $21,790 | $21,790 | $30,528 | $4,711 |
| 22 | North Carolina | $25,564 | $25,695 | $21,115 | $20,971 | $28,856 | $4,593 |
| 23 | Texas | $22,365 | $22,365 | $17,829 | $17,829 | $25,147 | $4,536 |
| 24 | South Dakota | $22,365 | $22,403 | $17,891 | $17,891 | $25,197 | $4,474 |
| 25 | Florida | $22,365 | $22,461 | $17,900 | $17,909 | $25,380 | $4,465 |
| 26 | New York | $26,808 | $26,826 | $22,344 | $22,344 | $31,765 | $4,464 |
| 27 | Maryland | $26,413 | $26,608 | $21,993 | $21,993 | $31,752 | $4,420 |
| 28 | Maine | $26,989 | $27,042 | $22,604 | $22,604 | $30,554 | $4,385 |
| 29 | North Dakota | $22,897 | $22,930 | $18,565 | $18,544 | $26,547 | $4,353 |
| 30 | Pennsylvania | $25,218 | $25,223 | $20,886 | $20,886 | $30,465 | $4,332 |
| 31 | Wisconsin | $25,910 | $25,926 | $21,638 | $21,638 | $31,014 | $4,272 |
| 32 | Delaware | $27,315 | $27,568 | $23,179 | $23,046 | $32,491 | $4,269 |
| 33 | Minnesota | $27,161 | $27,161 | $22,912 | $22,912 | $33,104 | $4,249 |
| 34 | Alaska | $22,399 | $22,434 | $18,241 | $18,241 | $25,951 | $4,158 |
| 35 | Connecticut | $25,901 | $25,952 | $21,746 | $21,801 | $31,165 | $4,155 |
| 36 | Vermont | $26,039 | $26,067 | $21,930 | $21,941 | $30,862 | $4,109 |
| 37 | Oregon | $29,923 | $29,984 | $25,815 | $25,815 | $34,854 | $4,108 |
| 38 | Wyoming | $22,365 | $22,406 | $18,314 | $18,314 | $25,541 | $4,051 |
| 39 | Illinois | $26,821 | $27,842 | $22,785 | $22,785 | $32,580 | $4,036 |
| 40 | District of Columbia | $30,600 | $30,693 | $26,594 | $26,594 | $32,232 | $4,006 |
| 41 | Colorado | $25,746 | $25,762 | $21,748 | $21,748 | $30,348 | $3,998 |
| 42 | Massachusetts | $26,792 | $27,116 | $23,171 | $22,860 | $32,165 | $3,932 |
| 43 | Rhode Island | $25,233 | $25,530 | $21,426 | $21,426 | $30,652 | $3,807 |
| 45 | Hawaii | $31,372 | $31,380 | $27,712 | $27,712 | $35,413 | $3,660 |
| 46 | Nevada | $22,503 | $22,608 | $18,906 | $19,154 | $26,226 | $3,597 |
| 47 | Washington | $23,929 | $23,978 | $20,610 | $20,610 | $27,515 | $3,319 |
| 48 | New Jersey | $26,095 | $26,143 | $22,793 | $22,793 | $31,491 | $3,302 |
| 49 | Ohio | $22,365 | $22,365 | $19,197 | $19,197 | $25,907 | $3,168 |
| 50 | New Hampshire | $23,668 | $23,737 | $21,299 | $21,299 | $27,958 | $2,369 |
| 51 | Tennessee | $22,365 | $27,161 | $21,055 | $20,825 | $27,579 | $1,540 |
Calculators
- Business structure switching calculatorAny structure to any other, in any state: the yearly saving and the break-even profit.
- S corp tax savings calculatorWhat an S corp election saves an LLC or sole proprietor in your state, after payroll costs.
- Self-employment tax calculatorSocial Security and Medicare on business profit for 2026, and the half you deduct.
- S corp payroll cost calculatorEmployer and employee payroll taxes on an owner salary, by state.
- C corp double tax calculatorCorporate tax plus dividend tax against an S corp, by state.
- Take-home pay calculator by business structureWhat you keep from your profit as a sole proprietor, LLC, S corp or C corp, by state.
- S corp salary calculatorThe yearly cost of an S corp at each owner salary, against a plain LLC, in your state.
- Quarterly estimated tax calculatorThe four 2026 estimated tax payments for a self-employed owner, with the safe harbors.
- QBI deduction calculatorThe 20% qualified business income deduction, with the wage limit and the service-business rule.
- LLC cost calculatorWhat forming and keeping an LLC costs in your state: the first year and five years.
Is an S corp worth it at your profit?
By profession
- Management consultant
- Software developer
- Graphic designer
- Photographer
- Real estate agent
- Insurance agent
- Financial advisor
- Therapist
- Physical therapist
- Nurse practitioner
- Physician
- Dentist
- Lawyer
- Accountant
- Freelance writer
- Web developer
- Marketing consultant
- Electrician
- Plumber
- General contractor
- Truck driver
- Hair stylist
- Personal trainer
- Rideshare driver
Compare across states
- LLC vs S corp in every state
- What an LLC costs in each state
- S corp vs C corp in every state
- Sole proprietorship
- Single-member LLC
- S corporation
- C corporation
Guides
- LLC vs S corp: what is actually different
- How sole proprietors are taxed
- How a single-member LLC is taxed
- How a multi-member LLC is taxed
- When a C corp makes sense
- How to elect S corp status with Form 2553
- How to set a reasonable salary for an S corp owner
- What payroll costs an S corp owner
- Health insurance for S corp owners (2% shareholders)
- Accountable plans for S corp owners
- How to revoke an S corp election
- How self-employment tax works
- Quarterly estimated taxes for business owners
- The QBI deduction (Section 199A) in 2026
- Pass-through entity tax elections and the SALT cap
- Solo 401(k) contributions by business structure
- How to form an LLC
- Forming your LLC in another state
- State franchise taxes and other taxes on the business itself
- How to pay yourself from an LLC or S corp
Questions
Which business structure costs the least?
It depends on profit and state. Below roughly $40,000 to $60,000 of profit a sole proprietorship or plain LLC usually costs least. Above that, an S corp election usually saves Social Security and Medicare tax, minus the cost of running payroll. A C corporation tends to cost more for an owner who takes all profit out.
Does forming an LLC lower my taxes?
Not by itself. A single-member LLC is taxed like a sole proprietorship. The tax change comes from electing S corp treatment, which the LLC can do with IRS Form 2553.
What is included in the yearly cost?
Federal and state income tax on the business profit, self-employment or payroll tax, state franchise and entity taxes, the state yearly report fee, and for S and C corps an estimate for payroll and the business tax return. Tax on other household income is left out.
How current are the figures?
Federal figures are for 2026 from IRS Revenue Procedure 2025-32 and the Social Security Administration. State figures were last checked on October 24, 2026, and each state page links to its sources.