StructureCost2026

LLC or S corp for a physical therapist in Maryland (2026)

A physical therapist in Maryland with $110,000 of profit pays $29,904 a year in tax and fees as a sole proprietor and $30,695 as an LLC taxed as an S corp, with a $77,000 salary. The S corp starts to pay at about $270,000 of profit.

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

+$791 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: $110,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$15,543$0−$15,543
Federal income taxirs.gov, 2026 rates$9,871$12,084+$2,213
State income tax, after the PTET creditmarylandcomptroller.gov, checked Oct 23, 2026$4,490$2,302−$2,188
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$12,044+$12,044
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$2,165+$2,165
Yearly cost$29,904$30,695+$791
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$19,814$20,030$20,326$23,708
$110,000$77,000$29,904$30,099$30,695$36,015
$160,000$103,000$47,509$47,698$46,668$56,243

Salary is the BLS median for the job ($102,760), capped at 70% of profit. Revenue 2.4 times profit. Single filer.

What matters for physical therapists

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 physical therapist in Maryland form an S corp?

At $110,000 of profit, not on these figures: the S corp costs $791 a year more than staying a sole proprietor.

Is an LLC worth it for a physical therapist in Maryland?

For tax, a single-member LLC changes nothing: $30,099 a year against $29,904, 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