Illinois: what each business structure costs a year
At $100,000 profit, an LLC taxed as an S corp costs $4,036 a year less than a sole proprietorship in Illinois. All figures are 2026 tax and fees.
$4,036 a year
less as an LLC taxed as an S corp than as a sole proprietorship in Illinois, at these numbers. That includes the state's pass-through entity tax election.
Illinois, 2026: $100,000 profit, single filer
| Structure | Yearly cost | vs yours | To set up | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sole proprietorship yours | $26,821 | $0 | |||||||||||||||||
Itemized: $26,821
| |||||||||||||||||||
| Single-member LLC | $27,842 | +$1,021 | $150 | ||||||||||||||||
Itemized: $27,842
| |||||||||||||||||||
| LLC taxed as an S corp lowest | $22,785 | −$4,036 | $150 | ||||||||||||||||
Itemized: $22,785
| |||||||||||||||||||
| S corporation | $22,785 | −$4,036 | $150 | ||||||||||||||||
Itemized: $22,785
| |||||||||||||||||||
| C corporation | $32,580 | +$5,759 | $150 | ||||||||||||||||
Itemized: $32,580
| |||||||||||||||||||
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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.
When an S corp election pays in Illinois
Electing S corp tax treatment for an LLC starts to pay in Illinois at about $47,500 of profit, with the default salary and $1,800 a year for payroll and the extra tax return.
An S corp in Illinois can elect to pay the state's income tax itself, a pass-through entity tax of 4.95%, and the owner gets a credit for it. The company deducts it on the federal return, so it is not held to the SALT cap. The calculator uses it when it lowers the totaltax.illinois.gov.
| Profit | Sole prop | LLC | LLC as S corp | C corp |
|---|---|---|---|---|
| $30,000 | $6,416 | $6,804 | $8,145 | $8,602 |
| $50,000 | $11,887 | $12,484 | $12,097 | $14,787 |
| $75,000 | $18,800 | $19,669 | $15,938 | $22,798 |
| $100,000 | $26,821 | $27,842 | $22,785 | $32,580 |
| $150,000 | $44,363 | $45,873 | $37,750 | $54,205 |
| $200,000 | $62,486 | $64,459 | $53,532 | $75,015 |
| $300,000 | $106,065 | $107,587 | $87,361 | $117,796 |
Single filer, no other income, revenue taken as 1.5 times profit, default salary. The lowest cost in each row is marked.
State fees and taxes in Illinois
| LLC | Corporation | ||
|---|---|---|---|
| Filing to form | $150Articles of Organization (Form LLC-5.5) | $150Articles of Incorporation (Form BCA 2.10) | ilsos.gov |
| Yearly report | Annual Report (Form LLC-50.1), $75 a year | Annual Report (Form BCA 14.05), $75 a year | ilsos.gov |
| Report due | Before the first day of the anniversary month of organization | Before the first day of the anniversary month of incorporation | |
| Illinois personal property replacement income tax (partnerships and S corps)1.5% of net income | yes | S corp only | tax.illinois.gov |
- Illinois taxes personal income at a flat 4.95% (2026). tax.illinois.gov
- C corporations pay 9.5% of net income. tax.illinois.gov
- Illinois follows the federal S corp election.
- New employers pay state unemployment tax of 3.35% on the first $14,250 of each employee's wages. That applies to an owner's salary from an S or C corp. ides.illinois.gov
- Series LLCs pay $400 to form and $50 per series on the annual report. $100 penalty if the report is late.
- Franchise tax is also due at formation (0.15% of paid-in capital) and yearly (0.1%, min $25), but the first $10,000 of liability is exempt from 2025, so small corporations owe none.
Not in the calculator: https://api.chicityclerkelms.chicago.gov/matter/39036309-ECD5-F011-8543-001DD8018EAF
Switching calculators for Illinois
- Sole proprietorship vs LLC
- LLC vs S corp
- Sole proprietorship vs S corp
- S corp vs C corp
- LLC vs C corp
- Sole proprietorship vs C corp
- LLC taxed as S corp vs S corporation
- What an LLC costs in Illinois
- Take-home pay in Illinois
- Quarterly estimated tax in Illinois
By profession in Illinois
- Management consultant
- Software developer
- Graphic designer
- Photographer
- Real estate agent
- Insurance agent
- Financial advisor
- Therapist
- Physical therapist
- Nurse practitioner
- Physician
- Dentist
- Lawyer
- Accountant
- Freelance writer
- Web developer
- Marketing consultant
- Electrician
- Plumber
- General contractor
- Truck driver
- Hair stylist
- Personal trainer
- Rideshare driver
Questions
Is an S corp worth it in Illinois?
On these figures, from about $47,500 of profit. At $100,000 an LLC taxed as an S corp costs $22,785 a year against $27,842 for a plain LLC, $5,057 less. The saving comes from paying Social Security and Medicare tax on a salary instead of on all profit.
How much does an LLC cost per year in Illinois?
The state charges Annual Report (Form LLC-50.1), $75 a year. LLCs can also owe Illinois personal property replacement income tax (partnerships and S corps). Forming one costs $150.
Does Illinois recognise the S corp election?
Yes. The federal election carries over with no separate state form. Illinois follows the federal S election, but S corps pay the 1.5% replacement tax. An optional 4.95% pass-through entity tax election exists, not modelled.
What income tax does Illinois charge?
Illinois taxes personal income at a flat 4.95% (2026). C corporations pay 9.5% of net income.
How this page models Illinois (3)
- Chicago's adopted 2026 revenue ordinance (SO2025-0021719, passed December 19, 2025) has no employer head tax; the city's 2027 budget overview proposes one for 2027, so the note says it is a proposal.
- 805 ILCS 5/15.45 sets the initial franchise tax at 15/100 of 1% and the annual tax at 1/10 of 1% (minimum $25), and 805 ILCS 5/15.35 exempts the first $10,000 of liability on and after January 1, 2025.
- 805 ILCS 5/15.35 lists the initial franchise tax (a) and the annual franchise tax (d) among the taxes it imposes, and exempts the first $10,000 of liability from 'the tax imposed under this Section', so the exemption covers the initial franchise tax paid at formation too.
Sources checked 2026-10-24. Each figure links to the state or IRS page it comes from.
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