LLC vs S corp in Colorado: which costs less (2026)
At $100,000 profit in Colorado, a single-member LLC costs $25,762 a year in tax and fees and an LLC taxed as an S corp costs $21,748. An LLC taxed as an S corp starts to cost less from about $55,000 of profit.
$4,014 a year
saved by switching from a single-member LLC to an LLC taxed as an S corp in Colorado, at these numbers.
Switching from a single-member LLC to an LLC taxed as an S corp starts to pay at about $55,000 of profit, with the same settings. 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: $100,000 profit, single filer
| Item | LLC | LLC as S corp | Change |
|---|---|---|---|
| Periodic Reportsos.state.co.us, checked Oct 24, 2026 | $25 | $25 | $0 |
| Self-employment taxirs.gov, 2026 rates | $14,126 | $0 | −$14,126 |
| Federal income taxirs.gov, 2026 rates | $8,231 | $9,050 | +$819 |
| State income tax, after the PTET credittax.colorado.gov, checked Oct 24, 2026 | $3,380 | $1,052 | −$2,328 |
| Payroll tax on your salaryirs.gov, 2026 rates | $0 | $7,271 | +$7,271 |
| State disability and paid leavefamli.colorado.gov, checked Oct 24, 2026 | $0 | $176 | +$176 |
| 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 | $2,374 | +$2,374 |
| Yearly cost | $25,762 | $21,748 | −$4,014 |
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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 | LLC as S corp | Difference |
|---|---|---|---|
| $30,000 | $5,718 | $7,797 | +$2,079 |
| $50,000 | $11,086 | $11,676 | +$590 |
| $75,000 | $17,872 | $15,071 | −$2,801 |
| $100,000 | $25,762 | $21,748 | −$4,014 |
| $150,000 | $43,049 | $36,312 | −$6,737 |
| $200,000 | $60,920 | $51,686 | −$9,234 |
| $300,000 | $103,944 | $84,853 | −$19,091 |
Federal and Colorado tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is LLC taxed as an S corp minus Single-member LLC.
What the switch takes in Colorado
- 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
- 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.
- 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.
- Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
- State upkeep each year: Periodic Report, $25 a year, due within two months before or after the anniversary month of formation.
What changes between the two
A plain LLC pays self-employment tax of 15.3% on 92.35% of all profit, up to the Social Security wage base of $184,500. Taxed as an S corp, the business pays you a salary, and only the salary carries Social Security and Medicare tax. The rest comes out as a distribution.
The election adds costs: a payroll service, a separate business tax return (Form 1120-S), federal and Colorado unemployment tax on the salary. The calculator counts $1,800 a year for payroll and the return. The IRS expects a reasonable salary for the work, so it cannot be set near zero.
Questions
At what profit does an S corp election pay in Colorado?
About $55,000 a year, on the default salary (40% of profit, at least $30,000 where profit allows) and $1,800 of yearly payroll and return costs. Change the salary in the calculator to see how the point moves.
How much does it save at $100,000 in Colorado?
$4,014 a year: Single-member LLC $25,762, LLC taxed as an S corp $21,748.
Does Colorado recognise the S corp election?
Yes. No separate state form is needed.
More for Colorado
- All five structures in Colorado
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- LLC taxed as S corp vs S corporation
- What an LLC costs in Colorado
- LLC vs S corp in every state
- Take-home pay in Colorado
- Quarterly estimated tax in Colorado
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