StructureCost2026

LLC or S corp for a software developer in Maine (2026)

A software developer in Maine with $150,000 of profit pays $45,553 a year in tax and fees as a sole proprietor and $47,167 as an LLC taxed as an S corp, with a $105,000 salary. The S corp starts to pay at about $290,000 of profit.

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

+$1,614 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $290,000 of profit, with the same settings. Setting up costs $175 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.

Maine, 2026: $150,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$21,194$0−$21,194
Federal income taxirs.gov, 2026 rates$16,413$20,126+$3,713
State income tax, after the PTET creditmaine.gov, checked Oct 20, 2026$7,946$5,735−$2,211
Annual Reportmaine.gov, checked Oct 20, 2026$0$85+$85
Payroll tax on your salaryirs.gov, 2026 rates$0$16,412+$16,412
State disability and paid leavelegislature.maine.gov, checked Oct 20, 2026$0$525+$525
Payroll service and tax return (estimate)$0$1,800+$1,800
Maine pass-through entity tax, paid by the company (elected)maine.gov, checked Oct 20, 2026$0$2,484+$2,484
Yearly cost$45,553$47,167+$1,614
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
$100,000$70,000$26,989$27,042$28,272$32,076
$150,000$105,000$45,553$45,606$47,167$52,818
$220,000$136,000$70,463$70,523$71,132$81,926

Salary is the BLS median for the job ($135,980), capped at 70% of profit. Revenue 2.2 times profit. Single filer.

What matters for software developers

What the switch takes in Maine

  1. File the Certificate of Formation (MLLC-6) with the state: $175 (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 Maine 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 Maine unemployment tax at 2.54% on the first $12,000 of wages. maine.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, $85 a year, due June 1 (first report due the year after formation).

Questions

Should a software developer in Maine form an S corp?

At $150,000 of profit, not on these figures: the S corp costs $1,614 a year more than staying a sole proprietor.

Is an LLC worth it for a software developer in Maine?

For tax, a single-member LLC changes nothing: $45,606 a year against $45,553, the difference being Maine's LLC fees. It separates business liability and is the base for an S corp election.

More

Other professions in Maine
Other states