StructureCost2026

LLC vs S corp in Illinois: which costs less (2026)

At $100,000 profit in Illinois, a single-member LLC costs $27,842 a year in tax and fees and an LLC taxed as an S corp costs $22,785. An LLC taxed as an S corp starts to cost less from about $47,500 of profit.

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

$5,057 a year

saved by switching from a single-member LLC to an LLC taxed as an S corp in Illinois, at these numbers.

Switching from a single-member LLC to an LLC taxed as an S corp starts to pay at about $47,500 of profit, with the same settings. 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: $100,000 profit, single filer

ItemLLCLLC as S corpChange
Annual Report (Form LLC-50.1)ilsos.gov, checked Oct 24, 2026$75$75$0
Illinois personal property replacement income tax (partnerships and S corps)tax.illinois.gov, checked Oct 24, 2026$1,500$819−$681
Self-employment taxirs.gov, 2026 rates$13,907$0−$13,907
Federal income taxirs.gov, 2026 rates$7,977$8,958+$981
State income tax, after the PTET credittax.illinois.gov, checked Oct 24, 2026$4,383$1,835−$2,548
Payroll tax on your salaryirs.gov, 2026 rates$0$6,639+$6,639
Payroll service and tax return (estimate)$0$1,800+$1,800
Illinois pass-through entity tax, paid by the company (elected)tax.illinois.gov, checked Oct 24, 2026$0$2,659+$2,659
Yearly cost$27,842$22,785−$5,057
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.

Yearly cost at each profit level

ProfitLLCLLC as S corpDifference
$30,000$6,804$8,145+$1,341
$50,000$12,484$12,097−$387
$75,000$19,669$15,938−$3,731
$100,000$27,842$22,785−$5,057
$150,000$45,873$37,750−$8,123
$200,000$64,459$53,532−$10,927
$300,000$107,587$87,361−$20,226

Federal and Illinois tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is LLC taxed as an S corp minus Single-member LLC.

What the switch takes in Illinois

  1. 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
  2. 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.
  3. 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.
  4. Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
  5. State upkeep each year: Annual Report (Form LLC-50.1), $75 a year, due before the first day of the anniversary month of organization.

What changes between the two

A plain LLC pays self-employment tax of 15.3% on 92.35% of all profit, up to the Social Security wage base of $184,500. Taxed as an S corp, the business pays you a salary, and only the salary carries Social Security and Medicare tax. The rest comes out as a distribution.

The election adds costs: a payroll service, a separate business tax return (Form 1120-S), federal and Illinois unemployment tax on the salary. The calculator counts $1,800 a year for payroll and the return. The IRS expects a reasonable salary for the work, so it cannot be set near zero.

Questions

At what profit does an S corp election pay in Illinois?

About $47,500 a year, on the default salary (40% of profit, at least $30,000 where profit allows) and $1,800 of yearly payroll and return costs. Change the salary in the calculator to see how the point moves.

How much does it save at $100,000 in Illinois?

$5,057 a year: Single-member LLC $27,842, LLC taxed as an S corp $22,785.

Does Illinois recognise the S corp election?

Yes. No separate state form is needed.

More for Illinois

Common cases in Illinois

Other states