StructureCost2026

LLC or S corp for a freelance writer in Hawaii (2026)

A freelance writer in Hawaii with $80,000 of profit pays $26,085 a year in tax and fees as a sole proprietor and $28,437 as an LLC taxed as an S corp, with a $56,000 salary. The S corp starts to pay at about $340,000 of profit.

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

+$2,352 a year

more for an LLC taxed as an S corp than a sole proprietorship in Hawaii, at these numbers.

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $340,000 of profit, with the same settings. Setting up costs $50 once in state filing fees. As an LLC taxed as an S corp this uses the state's pass-through entity tax election, which lowers the cost here.

Hawaii, 2026: $80,000 profit, single filer

ItemSole propLLC as S corpChange
Hawaii general excise tax (GET)tax.hawaii.gov, checked Oct 20, 2026$8,000$8,000$0
Self-employment taxirs.gov, 2026 rates$10,173$0−$10,173
Federal income taxirs.gov, 2026 rates$4,630$5,283+$653
State income tax, after the PTET creditfiles.hawaii.gov, checked Oct 20, 2026$3,282$2,333−$949
Annual Reportcca.hawaii.gov, checked Oct 20, 2026$0$15+$15
Payroll tax on your salaryirs.gov, 2026 rates$0$9,960+$9,960
State disability and paid leavelabor.hawaii.gov, checked Oct 20, 2026$0$280+$280
Payroll service and tax return (estimate)$0$1,800+$1,800
Hawaii pass-through entity tax, paid by the company (elected)files.hawaii.gov, checked Oct 20, 2026$0$766+$766
Yearly cost$26,085$28,437+$2,352
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.

At three profit levels

ProfitSalary usedSole propLLCLLC as S corpC corp
$60,000$42,000$18,692$18,703$20,757$21,725
$80,000$56,000$26,085$26,096$28,437$29,758
$120,000$77,000$42,628$42,637$44,859$48,866

Salary is the BLS median for the job ($76,910), capped at 70% of profit. Revenue 2.5 times profit. Single filer.

What matters for freelance writers

What the switch takes in Hawaii

  1. File the Articles of Organization (Form LLC-1) with the state: $50 (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 Hawaii 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 Hawaii unemployment tax at 2.4% on the first $64,500 of wages. labor.hawaii.gov 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, $15 a year, due End of the calendar quarter in which the company was registered.

Questions

Should a freelance writer in Hawaii form an S corp?

At $80,000 of profit, not on these figures: the S corp costs $2,352 a year more than staying a sole proprietor.

Is an LLC worth it for a freelance writer in Hawaii?

For tax, a single-member LLC changes nothing: $26,096 a year against $26,085, the difference being Hawaii's LLC fees. It separates business liability and is the base for an S corp election.

More

Other professions in Hawaii
Other states