StructureCost2026

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

A therapist in Hawaii with $70,000 of profit pays $21,005 a year in tax and fees as a sole proprietor and $22,939 as an LLC taxed as an S corp, with a $49,000 salary. The S corp starts to pay at about $472,500 of profit.

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

+$1,934 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 $472,500 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: $70,000 profit, single filer

ItemSole propLLC as S corpChange
Hawaii general excise tax (GET)tax.hawaii.gov, checked Oct 20, 2026$5,040$5,040$0
Self-employment taxirs.gov, 2026 rates$9,179$0−$9,179
Federal income taxirs.gov, 2026 rates$4,002$4,501+$499
State income tax, after the PTET creditfiles.hawaii.gov, checked Oct 20, 2026$2,784$1,792−$992
Annual Reportcca.hawaii.gov, checked Oct 20, 2026$0$15+$15
Payroll tax on your salaryirs.gov, 2026 rates$0$8,720+$8,720
State disability and paid leavelabor.hawaii.gov, checked Oct 20, 2026$0$245+$245
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$826+$826
Yearly cost$21,005$22,939+$1,934
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
$40,000$28,000$10,594$10,605$12,218$13,000
$70,000$49,000$21,005$21,015$22,939$24,358
$90,000$59,000$28,034$28,045$29,861$32,745

Salary is the BLS median for the job ($59,350), capped at 70% of profit. Revenue 1.8 times profit. Single filer.

What matters for therapists

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 therapist in Hawaii form an S corp?

At $70,000 of profit, not on these figures: the S corp costs $1,934 a year more than staying a sole proprietor.

Is an LLC worth it for a therapist in Hawaii?

For tax, a single-member LLC changes nothing: $21,015 a year against $21,005, 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