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

At $100,000 profit in Indiana, a single-member LLC costs $25,087 a year in tax and fees and an LLC taxed as an S corp costs $20,323. An LLC taxed as an S corp starts to cost less from about $50,000 of profit.

$4,764 a year

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

Switching from a single-member LLC to an LLC taxed as an S corp starts to pay at about $50,000 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.

Indiana, 2026: $100,000 profit, single filer

Item	LLC	LLC as S corp	Change
Business Entity Reportin.gov, checked Oct 20, 2026	$16	$16	$0
Self-employment taxirs.gov, 2026 rates	$14,127	$0	−$14,127
Federal income taxirs.gov, 2026 rates	$8,232	$9,338	+$1,106
State income tax, after the PTET creditin.gov, checked Oct 20, 2026	$2,712	$1,151	−$1,561
Payroll tax on your salaryirs.gov, 2026 rates	$0	$6,400	+$6,400
Payroll service and tax return (estimate)	$0	$1,800	+$1,800
Indiana pass-through entity tax, paid by the company (elected)secure.in.gov, checked Oct 20, 2026	$0	$1,618	+$1,618
Yearly cost	$25,087	$20,323	−$4,764

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

Profit	LLC	LLC as S corp	Difference
$30,000	$5,987	$7,459	+$1,472
$50,000	$11,086	$10,876	−$210
$75,000	$17,533	$13,944	−$3,589
$100,000	$25,087	$20,323	−$4,764
$150,000	$41,701	$34,134	−$7,567
$200,000	$58,897	$48,729	−$10,168
$300,000	$100,494	$80,567	−$19,927

Federal and Indiana 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 Indiana

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
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.
Register with Indiana 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 Indiana unemployment tax at 2.5% on the first $9,500 of wages. in.gov See what payroll costs.
Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
State upkeep each year: Business Entity Report, $31 every two years, due End of the anniversary month of formation, every other year.

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 Indiana 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 Indiana?

About $50,000 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 Indiana?

$4,764 a year: Single-member LLC $25,087, LLC taxed as an S corp $20,323.

Does Indiana recognise the S corp election?

Yes. No separate state form is needed.

More for Indiana

Common cases in Indiana

Other states