StructureCost2026

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

A freelance writer in Illinois with $80,000 of profit pays $20,183 a year in tax and fees as a sole proprietor and $21,039 as an LLC taxed as an S corp, with a $56,000 salary. The S corp starts to pay at about $287,500 of profit.

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

+$856 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $287,500 of profit, with the same settings. Setting up costs $150 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.

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

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$11,304$0−$11,304
Federal income taxirs.gov, 2026 rates$5,344$6,344+$1,000
State income tax, after the PTET credittax.illinois.gov, checked Oct 24, 2026$3,535$2,627−$908
Annual Report (Form LLC-50.1)ilsos.gov, checked Oct 24, 2026$0$75+$75
Payroll tax on your salaryirs.gov, 2026 rates$0$9,087+$9,087
Payroll service and tax return (estimate)$0$1,800+$1,800
Illinois personal property replacement income tax (partnerships and S corps)tax.illinois.gov, checked Oct 24, 2026$0$261+$261
Illinois pass-through entity tax, paid by the company (elected)tax.illinois.gov, checked Oct 24, 2026$0$845+$845
Yearly cost$20,183$21,039+$856
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$14,652$15,358$15,519$17,721
$80,000$56,000$20,183$21,105$21,039$24,220
$120,000$77,000$33,837$35,055$33,887$40,913

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 Illinois

  1. File the Articles of Organization (Form LLC-5.5) with the state: $150 (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 Illinois 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 Illinois unemployment tax at 3.35% on the first $14,250 of wages. ides.illinois.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 (Form LLC-50.1), $75 a year, due before the first day of the anniversary month of organization. New for you: Illinois personal property replacement income tax (partnerships and S corps).

Questions

Should a freelance writer in Illinois form an S corp?

At $80,000 of profit, not on these figures: the S corp costs $856 a year more than staying a sole proprietor.

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

For tax, a single-member LLC changes nothing: $21,105 a year against $20,183, the difference being Illinois's LLC fees and LLC taxes. It separates business liability and is the base for an S corp election.

More

Other professions in Illinois
Other states