LLC vs C corp in Delaware: which costs less (2026)

At $100,000 profit in Delaware, a single-member LLC costs $27,568 a year in tax and fees and a C corporation costs $32,491. On these figures a C corporation does not cost less at any profit up to $500,000.

+$4,923 a year

more for a C corporation than a single-member LLC in Delaware, at these numbers.

With these settings the switch does not pay at any profit from $10,000 to $500,000.

Delaware, 2026: $100,000 profit, single filer

Item	LLC	C corp	Change
Delaware annual LLC taxcorp.delaware.gov, checked Oct 23, 2026	$400	$0	−$400
Delaware business licenserevenuefiles.delaware.gov, checked Oct 23, 2026	$75	$75	$0
Self-employment taxirs.gov, 2026 rates	$14,062	$0	−$14,062
Federal income taxirs.gov, 2026 rates	$8,157	$4,674	−$3,483
State income taxrevenuefiles.delaware.gov, checked Oct 23, 2026	$4,874	$3,999	−$875
Annual Franchise Tax Reportcorp.delaware.gov, checked Oct 23, 2026	$0	$50	+$50
Payroll tax on your salaryirs.gov, 2026 rates	$0	$6,352	+$6,352
Payroll service and tax return (estimate)	$0	$2,000	+$2,000
Delaware corporate franchise tax (minimum)corp.delaware.gov, checked Oct 23, 2026	$0	$175	+$175
State corporate income taxrevenue.delaware.gov, checked Oct 23, 2026	$0	$4,734	+$4,734
Federal corporate income tax (21%)irs.gov, 2026 rates	$0	$10,432	+$10,432
Yearly cost	$27,568	$32,491	+$4,923

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	C corp	Difference
$30,000	$6,513	$8,290	+$1,777
$50,000	$12,086	$14,477	+$2,391
$75,000	$19,200	$22,445	+$3,245
$100,000	$27,568	$32,491	+$4,923
$150,000	$45,878	$54,640	+$8,762
$200,000	$64,783	$75,975	+$11,192
$300,000	$108,944	$119,849	+$10,905

Federal and Delaware tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is C corporation minus Single-member LLC.

What the switch takes in Delaware

Either convert the LLC to a corporation under state law, or keep the LLC and elect corporate tax treatment with IRS Form 8832.
Register with Delaware 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 Delaware unemployment tax at 1% on the first $14,500 of wages. labor.delaware.gov See what payroll costs.
Federal return each year: Form 1120, due April 15 for a calendar year.
State upkeep each year: Annual Franchise Tax Report, $50 a year, due March 1 for the prior year. New for you: Delaware corporate franchise tax (minimum).

What changes between the two

A C corporation pays 21% federal tax and Delaware corporate tax on its profit, and the owner pays tax again on dividends (the double tax). An LLC pays no federal income tax itself: profit lands on the owner's return, where the 20% qualified business income deduction can apply.

The figures assume all C corp profit after tax is paid out as dividends. Profit kept in the company to grow it is taxed only at the corporate rate until it is paid out, which is where a C corp can come out ahead.

Questions

How much does it save at $100,000 in Delaware?

Nothing. C corporation costs $4,923 a year more ($32,491 against $27,568).

When does a C corp make sense in Delaware?

Mostly when profit stays in the company, when outside investors need one, or for the qualified small business stock exclusion. For an owner who takes the profit out, the second tax on dividends usually costs more. On these figures it never costs less up to $500,000.

More for Delaware

Common cases in Delaware

Other states