StructureCost2026

LLC or S corp for a lawyer in Hawaii (2026)

A lawyer in Hawaii with $180,000 of profit pays $67,243 a year in tax and fees as a sole proprietor and $71,475 as an LLC taxed as an S corp, with a $126,000 salary. On these figures the S corp does not pay at any profit up to $500,000.

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

+$4,232 a year

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

With these settings the switch does not pay at any profit from $10,000 to $500,000. 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: $180,000 profit, single filer

ItemSole propLLC as S corpChange
Hawaii general excise tax (GET)tax.hawaii.gov, checked Oct 20, 2026$15,120$15,120$0
Self-employment taxirs.gov, 2026 rates$23,297$0−$23,297
Federal income taxirs.gov, 2026 rates$18,927$23,487+$4,560
State income tax, after the PTET creditfiles.hawaii.gov, checked Oct 20, 2026$9,899$7,464−$2,435
Annual Reportcca.hawaii.gov, checked Oct 20, 2026$0$15+$15
Payroll tax on your salaryirs.gov, 2026 rates$0$20,874+$20,874
State disability and paid leavelabor.hawaii.gov, checked Oct 20, 2026$0$390+$390
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$2,325+$2,325
Yearly cost$67,243$71,475+$4,232
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
$120,000$84,000$41,429$41,438$44,761$47,762
$180,000$126,000$67,243$67,253$71,475$75,831
$260,000$160,000$100,083$100,088$103,683$114,479

Salary is the BLS median for the job ($159,670), capped at 70% of profit. Revenue 2.1 times profit. Single filer.

What matters for lawyers

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 lawyer in Hawaii form an S corp?

At $180,000 of profit, not on these figures: the S corp costs $4,232 a year more than staying a sole proprietor.

Is an LLC worth it for a lawyer in Hawaii?

For tax, a single-member LLC changes nothing: $67,253 a year against $67,243, 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