StructureCost2026

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.

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

$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

ItemLLCLLC as S corpChange
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
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

ProfitLLCLLC as S corpDifference
$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

  1. 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
  2. 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.
  3. 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.
  4. Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
  5. 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

Common cases in Colorado

Other states