LLC taxed as S corp vs S corporation in Arizona: which costs less (2026)

At $100,000 profit in Arizona, an LLC taxed as an S corp costs $19,498 a year in tax and fees and an S corporation costs $19,535. On these figures an S corporation does not cost less at any profit up to $500,000.

+$37 a year

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

With these settings the switch does not pay at any profit from $10,000 to $500,000. Setting up costs $10 once in state filing fees. As an S corporation this uses the state's pass-through entity tax election, which lowers the cost here.

Arizona, 2026: $100,000 profit, single filer

Item	LLC as S corp	S corp	Change
Payroll tax on your salaryirs.gov, 2026 rates	$6,322	$6,322	$0
Payroll service and tax return (estimate)	$1,800	$1,800	$0
Arizona pass-through entity tax, paid by the company (elected)azleg.gov, checked Oct 23, 2026	$1,373	$1,372	−$1
Federal income taxirs.gov, 2026 rates	$9,397	$9,390	−$7
State income tax, after the PTET creditazdor.gov, checked Oct 23, 2026	$606	$606	$0
Annual Report (for-profit corporation)azcc.gov, checked Oct 23, 2026	$0	$45	+$45
Yearly cost	$19,498	$19,535	+$37

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.

Yearly cost at each profit level

Profit	LLC as S corp	S corp	Difference
$30,000	$6,893	$6,933	+$40
$50,000	$10,231	$10,270	+$39
$75,000	$13,196	$13,235	+$39
$100,000	$19,498	$19,535	+$37
$150,000	$33,121	$33,157	+$36
$200,000	$47,523	$47,558	+$35
$300,000	$79,029	$79,062	+$33

Federal and Arizona tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is S corporation minus LLC taxed as an S corp.

What the switch takes in Arizona

File the Articles of Incorporation (Form C010) with the state: $60 (fee).
Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
State upkeep each year: Annual Report (for-profit corporation), $45 a year, due Anniversary of the incorporation date.

What changes between the two

Both are taxed the same way by the IRS once the election is made: salary with payroll tax, the rest as a distribution, one Form 1120-S. The difference is state law: an LLC files Articles of Organization (Form L010) and no yearly report fee, a corporation files Articles of Incorporation (Form C010) and Annual Report (for-profit corporation), $45 a year.

A corporation also has formalities an LLC skips: a board, bylaws, share records and yearly minutes. Most one-person businesses pick the LLC route for that reason.

Questions

How much does it save at $100,000 in Arizona?

Nothing. S corporation costs $37 a year more ($19,535 against $19,498).

Is an LLC taxed as an S corp the same as an S corp?

For federal tax, yes. For Arizona fees and paperwork, no: the LLC pays no yearly report fee and the corporation Annual Report (for-profit corporation), $45 a year.

More for Arizona

Common cases in Arizona

Other states