StructureCost2026

LLC or S corp for a management consultant in Arkansas (2026)

A management consultant in Arkansas with $110,000 of profit pays $29,025 a year in tax and fees as a sole proprietor and $29,858 as an LLC taxed as an S corp, with a $77,000 salary. The S corp starts to pay at about $275,000 of profit.

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

+$833 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: $110,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$15,543$0−$15,543
Federal income taxirs.gov, 2026 rates$9,871$12,343+$2,472
State income tax, after the PTET exclusiondfa.arkansas.gov, checked Oct 23, 2026$3,611$2,678−$933
Payroll tax on your salaryirs.gov, 2026 rates$0$11,963+$11,963
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$924+$924
Yearly cost$29,025$29,858+$833
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
$110,000$77,000$29,025$29,123$29,858$34,298
$160,000$102,000$45,994$46,091$45,220$53,445

Salary is the BLS median for the job ($101,860), capped at 70% of profit. Revenue 1.7 times profit. Single filer.

What matters for management consultants

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 management consultant in Arkansas form an S corp?

At $110,000 of profit, not on these figures: the S corp costs $833 a year more than staying a sole proprietor.

Is an LLC worth it for a management consultant in Arkansas?

For tax, a single-member LLC changes nothing: $29,123 a year against $29,025, 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