StructureCost2026

LLC or S corp for a dentist in Arizona (2026)

A dentist in Arizona with $190,000 of profit pays $54,277 a year in tax and fees as a sole proprietor and $55,448 as an LLC taxed as an S corp, with a $133,000 salary. The S corp starts to pay at about $277,500 of profit.

More settings revenue, salary, filing status, payroll costs, PTET

+$1,171 a year

more for an LLC taxed as an S corp than a sole proprietorship in Arizona, at these numbers.

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $277,500 of profit, with the same settings. Setting up costs $50 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.

Arizona, 2026: $190,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$26,846$0−$26,846
Federal income taxirs.gov, 2026 rates$23,410$29,045+$5,635
State income tax, after the PTET creditazdor.gov, checked Oct 23, 2026$4,021$2,931−$1,090
Payroll tax on your salaryirs.gov, 2026 rates$0$20,551+$20,551
Payroll service and tax return (estimate)$0$1,800+$1,800
Arizona pass-through entity tax, paid by the company (elected)azleg.gov, checked Oct 23, 2026$0$1,121+$1,121
Yearly cost$54,277$55,448+$1,171
What these figures count
  • State income tax, and state taxes on the business itself: franchise, LLC, S corp, gross receipts and excise taxes.
  • Social Security and Medicare on both sides of an owner salary, federal unemployment tax and the state's new-employer rate.
  • The 20% qualified business income deduction with its income limits and the professional-service rule.
  • Yearly report fees, and a cost you can change for payroll and the business tax return.

Many S corp calculators leave out state taxes and the QBI deduction, which can make the election look better than it is.

At three profit levels

ProfitSalary usedSole propLLCLLC as S corpC corp
$130,000$91,000$34,137$34,137$34,901$40,568
$190,000$133,000$54,277$54,277$55,448$63,130
$270,000$171,000$85,252$85,252$83,555$95,163

Salary is the BLS median for the job ($170,950), capped at 70% of profit. Revenue 3.5 times profit. Single filer.

What matters for dentists

What the switch takes in Arizona

  1. File the Articles of Organization (Form L010) with the state: $50 (fee).
  2. Get an EIN from the IRS (free, online) and open a business bank account in the new name.
  3. Check the business can elect: no more than 100 shareholders, all of them US citizens or residents (no nonresident alien owners), and one class of stock. IRS
  4. File IRS Form 2553 to elect S corp tax treatment, within 2 months and 15 days of the start of the tax year it should apply to. See how the S corp election works.
  5. Register with Arizona as an employer and run payroll for your own salary: federal Forms 941 each quarter, Form 940 and a W-2 each year. New employers pay Arizona unemployment tax at 2% on the first $8,000 of wages. des.az.gov See what payroll costs.
  6. Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
  7. State upkeep each year: no yearly report fee, due none.

Questions

Should a dentist in Arizona form an S corp?

At $190,000 of profit, not on these figures: the S corp costs $1,171 a year more than staying a sole proprietor.

Is an LLC worth it for a dentist in Arizona?

For tax, a single-member LLC changes nothing: $54,277 a year against $54,277, the difference being Arizona's LLC fees. It separates business liability and is the base for an S corp election.

More

Other professions in Arizona
Other states