StructureCost2026

LLC or S corp for a therapist in Indiana (2026)

A therapist in Indiana with $70,000 of profit pays $16,233 a year in tax and fees as a sole proprietor and $16,568 as an LLC taxed as an S corp, with a $49,000 salary. The S corp starts to pay at about $277,500 of profit.

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

+$335 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $277,500 of profit, with the same settings. Setting up costs $95 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.

Indiana, 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$5,112+$660
State income tax, after the PTET creditin.gov, checked Oct 20, 2026$1,890$1,416−$474
Business Entity Reportin.gov, checked Oct 20, 2026$0$16+$16
Payroll tax on your salaryirs.gov, 2026 rates$0$7,777+$7,777
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$447+$447
Yearly cost$16,233$16,568+$335
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
$40,000$28,000$8,494$8,507$9,309$10,615
$70,000$49,000$16,233$16,243$16,568$18,960
$90,000$59,000$21,754$21,765$21,870$26,230

Salary is the BLS median for the job ($59,350), capped at 70% of profit. Revenue 1.8 times profit. Single filer.

What matters for therapists

What the switch takes in Indiana

  1. File the Articles of Organization (State Form 49459) with the state: $95 (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 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.
  6. Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
  7. State upkeep each year: Business Entity Report, $31 every two years, due End of the anniversary month of formation, every other year.

Questions

Should a therapist in Indiana form an S corp?

At $70,000 of profit, not on these figures: the S corp costs $335 a year more than staying a sole proprietor.

Is an LLC worth it for a therapist in Indiana?

For tax, a single-member LLC changes nothing: $16,243 a year against $16,233, the difference being Indiana's LLC fees. It separates business liability and is the base for an S corp election.

More

Other professions in Indiana
Other states