StructureCost2026

LLC or S corp for a insurance agent in Illinois (2026)

A insurance agent in Illinois with $70,000 of profit pays $17,418 a year in tax and fees as a sole proprietor and $18,155 as an LLC taxed as an S corp, with a $49,000 salary. The S corp starts to pay at about $287,500 of profit.

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

+$737 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: $70,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$9,891$0−$9,891
Federal income taxirs.gov, 2026 rates$4,452$5,035+$583
State income tax, after the PTET credittax.illinois.gov, checked Oct 24, 2026$3,075$2,281−$794
Annual Report (Form LLC-50.1)ilsos.gov, checked Oct 24, 2026$0$75+$75
Payroll tax on your salaryirs.gov, 2026 rates$0$8,016+$8,016
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$224+$224
Illinois pass-through entity tax, paid by the company (elected)tax.illinois.gov, checked Oct 24, 2026$0$724+$724
Yearly cost$17,418$18,155+$737
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
$50,000$35,000$11,887$12,484$12,883$14,674
$70,000$49,000$17,418$18,232$18,155$20,768
$100,000$62,000$26,821$27,842$26,668$32,845

Salary is the BLS median for the job ($62,280), capped at 70% of profit. Revenue 2.5 times profit. Single filer.

What matters for insurance agents

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 insurance agent in Illinois form an S corp?

At $70,000 of profit, not on these figures: the S corp costs $737 a year more than staying a sole proprietor.

Is an LLC worth it for a insurance agent in Illinois?

For tax, a single-member LLC changes nothing: $18,232 a year against $17,418, 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