StructureCost2026

LLC or S corp for a insurance agent in Arkansas (2026)

A insurance agent in Arkansas with $70,000 of profit pays $16,579 a year in tax and fees as a sole proprietor and $16,928 as an LLC taxed as an S corp, with a $49,000 salary. The S corp starts to pay at about $285,000 of profit.

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

+$349 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 $285,000 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: $70,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$9,891$0−$9,891
Federal income taxirs.gov, 2026 rates$4,452$5,098+$646
State income tax, after the PTET exclusiondfa.arkansas.gov, checked Oct 23, 2026$2,236$1,642−$594
Payroll tax on your salaryirs.gov, 2026 rates$0$7,679+$7,679
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$559+$559
Yearly cost$16,579$16,928+$349
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
$50,000$35,000$11,280$11,391$11,950$13,381
$70,000$49,000$16,579$16,688$16,928$19,051
$100,000$62,000$25,632$25,730$24,978$30,436

Salary is the BLS median for the job ($62,280), capped at 70% of profit. Revenue 2.5 times profit. Single filer.

What matters for insurance agents

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 insurance agent in Arkansas form an S corp?

At $70,000 of profit, not on these figures: the S corp costs $349 a year more than staying a sole proprietor.

Is an LLC worth it for a insurance agent in Arkansas?

For tax, a single-member LLC changes nothing: $16,688 a year against $16,579, 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