StructureCost2026

LLC or S corp for a freelance writer in Colorado (2026)

A freelance writer in Colorado with $80,000 of profit pays $19,211 a year in tax and fees as a sole proprietor and $20,645 as an LLC taxed as an S corp, with a $56,000 salary. The S corp starts to pay at about $292,500 of profit.

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

+$1,434 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $292,500 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.

Colorado, 2026: $80,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$11,304$0−$11,304
Federal income taxirs.gov, 2026 rates$5,344$6,295+$951
State income tax, after the PTET credittax.colorado.gov, checked Oct 24, 2026$2,563$1,756−$807
Periodic Reportsos.state.co.us, checked Oct 24, 2026$0$25+$25
Payroll tax on your salaryirs.gov, 2026 rates$0$9,790+$9,790
State disability and paid leavefamli.colorado.gov, checked Oct 24, 2026$0$246+$246
Payroll service and tax return (estimate)$0$1,800+$1,800
Colorado pass-through entity tax, paid by the company (elected)tax.colorado.gov, checked Oct 24, 2026$0$733+$733
Yearly cost$19,211$20,645+$1,434
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
$60,000$42,000$13,782$13,800$15,198$17,020
$80,000$56,000$19,211$19,229$20,645$23,368
$120,000$77,000$32,660$32,677$33,260$39,463

Salary is the BLS median for the job ($76,910), capped at 70% of profit. Revenue 2.5 times profit. Single filer.

What matters for freelance writers

What the switch takes in Colorado

  1. File the Articles of Organization 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 Colorado 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 Colorado unemployment tax at 3.05% on the first $30,600 of wages. cdle.colorado.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: Periodic Report, $25 a year, due within two months before or after the anniversary month of formation.

Questions

Should a freelance writer in Colorado form an S corp?

At $80,000 of profit, not on these figures: the S corp costs $1,434 a year more than staying a sole proprietor.

Is an LLC worth it for a freelance writer in Colorado?

For tax, a single-member LLC changes nothing: $19,229 a year against $19,211, the difference being Colorado's LLC fees. It separates business liability and is the base for an S corp election.

More

Other professions in Colorado
Other states