StructureCost2026

Sole proprietorship vs S corp in Florida: which costs less (2026)

At $100,000 profit in Florida, a sole proprietorship costs $22,365 a year in tax and fees and an LLC taxed as an S corp costs $17,900. An LLC taxed as an S corp starts to cost less from about $50,000 of profit.

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

$4,465 a year

saved by switching from a sole proprietorship to an LLC taxed as an S corp in Florida, at these numbers.

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $50,000 of profit, with the same settings. Setting up costs $125 once in state filing fees.

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

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$14,130$0−$14,130
Federal income taxirs.gov, 2026 rates$8,235$9,610+$1,375
Annual Reportdos.fl.gov, checked Oct 20, 2026$0$139+$139
Payroll tax on your salaryirs.gov, 2026 rates$0$6,351+$6,351
Payroll service and tax return (estimate)$0$1,800+$1,800
Yearly cost$22,365$17,900−$4,465
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

ProfitSole propLLC as S corpDifference
$30,000$5,181$6,792+$1,611
$50,000$9,732$9,671−$61
$75,000$15,495$12,071−$3,424
$100,000$22,365$17,900−$4,465
$150,000$37,607$30,466−$7,141
$200,000$53,430$43,792−$9,638
$300,000$92,125$73,408−$18,717

Federal and Florida 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 Sole proprietorship.

What the switch takes in Florida

  1. File the Articles of Organization (Form CR2E047) with the state: $125 (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 Florida 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 Florida unemployment tax at 2.7% on the first $7,000 of wages. floridarevenue.com 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: Annual Report, $139 a year, due Between January 1 and May 1, starting the year after formation.

What changes between the two

A sole proprietor 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 Florida 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.

A sole proprietor cannot elect S corp status alone: forming an LLC first ($125 in Florida) and electing on Form 2553 is the usual route.

Questions

At what profit does an S corp election pay in Florida?

About $50,000 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 Florida?

$4,465 a year: Sole proprietorship $22,365, LLC taxed as an S corp $17,900.

Does Florida recognise the S corp election?

Yes. No separate state form is needed.

More for Florida

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