LLC vs S corp in District of Columbia: which costs less (2026)

At $100,000 profit in District of Columbia, a single-member LLC costs $30,693 a year in tax and fees and an LLC taxed as an S corp costs $26,594. An LLC taxed as an S corp starts to cost less from about $45,000 of profit.

$4,099 a year

saved by switching from a single-member LLC to an LLC taxed as an S corp in District of Columbia, at these numbers.

Switching from a single-member LLC to an LLC taxed as an S corp starts to pay at about $45,000 of profit, with the same settings.

District of Columbia, 2026: $100,000 profit, single filer

Item	LLC	LLC as S corp	Change
Biennial Reportdlcp.dc.gov, checked Oct 23, 2026	$150	$150	$0
DC unincorporated business franchise taxotr.cfo.dc.gov, checked Oct 23, 2026	$5,363	$0	−$5,363
Self-employment taxirs.gov, 2026 rates	$13,351	$0	−$13,351
Federal income taxirs.gov, 2026 rates	$7,333	$8,750	+$1,417
State income taxotr.cfo.dc.gov, checked Oct 23, 2026	$4,496	$4,672	+$176
Payroll tax on your salaryirs.gov, 2026 rates	$0	$6,723	+$6,723
Payroll service and tax return (estimate)	$0	$1,800	+$1,800
DC corporation franchise tax on S corporationsotr.cfo.dc.gov, checked Oct 23, 2026	$0	$4,499	+$4,499
Yearly cost	$30,693	$26,594	−$4,099

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	$6,759	$7,638	+$879
$50,000	$13,228	$12,569	−$659
$75,000	$21,464	$18,263	−$3,201
$100,000	$30,693	$26,594	−$4,099
$150,000	$51,663	$45,023	−$6,640
$200,000	$73,071	$64,244	−$8,827
$300,000	$117,068	$103,440	−$13,628

Federal and District of Columbia 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 District of Columbia

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.
District of Columbia does not follow the S election: the state taxes the company as a corporation, which the figures above include.
Register with District of Columbia 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 District of Columbia unemployment tax at 2.7% on the first $9,000 of wages. does.dc.gov See what payroll costs.
Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
State upkeep each year: Biennial Report, $300 every two years, due April 1 every second year, first due April 1 of the year after formation. New for you: DC corporation franchise tax on S corporations.

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 District of Columbia unemployment tax on the salary, and DC corporation franchise tax on S corporations. 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 District of Columbia?

About $45,000 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 District of Columbia?

$4,099 a year: Single-member LLC $30,693, LLC taxed as an S corp $26,594.

Does District of Columbia recognise the S corp election?

No. District of Columbia taxes S corporations as corporations, and the calculator includes that.

More for District of Columbia

Common cases in District of Columbia

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