StructureCost2026

LLC or S corp for a accountant in Maryland (2026)

A accountant in Maryland with $90,000 of profit pays $22,923 a year in tax and fees as a sole proprietor and $23,783 as an LLC taxed as an S corp, with a $63,000 salary. The S corp starts to pay at about $270,000 of profit.

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

+$860 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $270,000 of profit, with the same settings. Setting up costs $100 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.

Maryland, 2026: $90,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$12,717$0−$12,717
Federal income taxirs.gov, 2026 rates$6,599$8,213+$1,614
State income tax, after the PTET creditmarylandcomptroller.gov, checked Oct 23, 2026$3,607$1,834−$1,773
Annual Report and Business Personal Property Return (Form 1)dat.maryland.gov, checked Oct 23, 2026$0$300+$300
Payroll tax on your salaryirs.gov, 2026 rates$0$9,902+$9,902
Payroll service and tax return (estimate)$0$1,800+$1,800
Maryland pass-through entity tax, paid by the company (elected)marylandcomptroller.gov, checked Oct 23, 2026$0$1,734+$1,734
Yearly cost$22,923$23,783+$860
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
$60,000$42,000$14,320$14,537$14,956$17,262
$90,000$63,000$22,923$23,118$23,783$28,032
$130,000$84,000$36,918$37,113$36,269$44,182

Salary is the BLS median for the job ($83,680), capped at 70% of profit. Revenue 2.1 times profit. Single filer.

What matters for accountants

What the switch takes in Maryland

  1. File the Articles of Organization with the state: $100 (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 Maryland 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 Maryland unemployment tax at 2.6% on the first $8,500 of wages. labor.maryland.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 and Business Personal Property Return (Form 1), $300 a year, due April 15 (online extension to June 15).

Questions

Should a accountant in Maryland form an S corp?

At $90,000 of profit, not on these figures: the S corp costs $860 a year more than staying a sole proprietor.

Is an LLC worth it for a accountant in Maryland?

For tax, a single-member LLC changes nothing: $23,118 a year against $22,923, the difference being Maryland's LLC fees. It separates business liability and is the base for an S corp election.

More

Other professions in Maryland
Other states