StructureCost2026

LLC or S corp for a financial advisor in Arkansas (2026)

A financial advisor in Arkansas with $120,000 of profit pays $32,416 a year in tax and fees as a sole proprietor and $33,237 as an LLC taxed as an S corp, with a $84,000 salary. The S corp starts to pay at about $275,000 of profit.

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

+$821 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $275,000 of profit, with the same settings. Setting up costs $45 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.

Arkansas, 2026: $120,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$16,955$0−$16,955
Federal income taxirs.gov, 2026 rates$11,506$14,301+$2,795
State income tax, after the PTET exclusiondfa.arkansas.gov, checked Oct 23, 2026$3,955$2,937−$1,018
Payroll tax on your salaryirs.gov, 2026 rates$0$13,034+$13,034
Payroll service and tax return (estimate)$0$1,800+$1,800
Arkansas LLC franchise taxsos.arkansas.gov, checked Oct 23, 2026$0$150+$150
Arkansas pass-through entity tax, paid by the company (elected)dfa.arkansas.gov, checked Oct 23, 2026$0$1,015+$1,015
Yearly cost$32,416$33,237+$821
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
$80,000$56,000$19,228$19,336$19,722$22,459
$120,000$84,000$32,416$32,516$33,237$38,119
$170,000$105,000$49,535$49,632$48,013$57,285

Salary is the BLS median for the job ($105,070), capped at 70% of profit. Revenue 5 times profit. Single filer.

What matters for financial advisors

What the switch takes in Arkansas

  1. File the Certificate of Organization (Form LL-01) with the state: $45 (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 Arkansas 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 Arkansas unemployment tax at 2% on the first $7,000 of wages. dws.arkansas.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: Annual LLC Franchise Tax Report, no fee, due May 1, starting the year after formation. New for you: Arkansas LLC franchise tax.

Questions

Should a financial advisor in Arkansas form an S corp?

At $120,000 of profit, not on these figures: the S corp costs $821 a year more than staying a sole proprietor.

Is an LLC worth it for a financial advisor in Arkansas?

For tax, a single-member LLC changes nothing: $32,516 a year against $32,416, the difference being Arkansas's LLC fees and LLC taxes. It separates business liability and is the base for an S corp election.

More

Other professions in Arkansas
Other states