StructureCost2026

LLC or S corp for a financial advisor in Kentucky (2026)

A financial advisor in Kentucky with $120,000 of profit pays $32,247 a year in tax and fees as a sole proprietor and $33,116 as an LLC taxed as an S corp, with a $84,000 salary. The S corp starts to pay at about $275,000 of profit.

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

+$869 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $275,000 of profit, with the same settings. Setting up costs $40 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.

Kentucky, 2026: $120,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$16,955$0−$16,955
Federal income taxirs.gov, 2026 rates$11,506$14,302+$2,796
State income tax, after the PTET creditrevenue.ky.gov, checked Oct 23, 2026$3,786$2,822−$964
Annual Reportsos.ky.gov, checked Oct 23, 2026$0$15+$15
Payroll tax on your salaryirs.gov, 2026 rates$0$13,218+$13,218
Payroll service and tax return (estimate)$0$1,800+$1,800
Kentucky pass-through entity tax, paid by the company (elected)revenue.ky.gov, checked Oct 23, 2026$0$959+$959
Yearly cost$32,247$33,116+$869
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
$80,000$56,000$19,133$19,143$19,673$22,631
$120,000$84,000$32,247$32,257$33,116$38,266
$170,000$105,000$49,273$49,283$47,806$57,471

Salary is the BLS median for the job ($105,070), capped at 70% of profit. Revenue 5 times profit. Single filer.

What matters for financial advisors

What the switch takes in Kentucky

  1. File the Articles of Organization with the state: $40 (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 Kentucky 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 Kentucky unemployment tax at 2.7% on the first $12,000 of wages. ui.ky.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, $15 a year, due June 30 (filing window January 1 to June 30). New for you: Kentucky limited liability entity tax (LLET).

Questions

Should a financial advisor in Kentucky form an S corp?

At $120,000 of profit, not on these figures: the S corp costs $869 a year more than staying a sole proprietor.

Is an LLC worth it for a financial advisor in Kentucky?

For tax, a single-member LLC changes nothing: $32,257 a year against $32,247, the difference being Kentucky's LLC fees and LLC taxes. It separates business liability and is the base for an S corp election.

More

Other professions in Kentucky
Other states