StructureCost2026

LLC or S corp for a hair stylist in Massachusetts (2026)

A hair stylist in Massachusetts with $40,000 of profit pays $9,066 a year in tax and fees as a sole proprietor and $10,918 as an LLC taxed as an S corp, with a $28,000 salary. The S corp starts to pay at about $292,500 of profit.

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

+$1,852 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $292,500 of profit, with the same settings. Setting up costs $500 once in state filing fees.

Massachusetts, 2026: $40,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$5,652$0−$5,652
Federal income taxirs.gov, 2026 rates$1,775$1,822+$47
State income taxmass.gov, checked Oct 23, 2026$1,639$1,514−$125
Annual Reportsec.state.ma.us, checked Oct 23, 2026$0$500+$500
Payroll tax on your salaryirs.gov, 2026 rates$0$4,697+$4,697
State disability and paid leavemass.gov, checked Oct 23, 2026$0$129+$129
Payroll service and tax return (estimate)$0$1,800+$1,800
Massachusetts corporate excise minimum (S corporation)mass.gov, checked Oct 23, 2026$0$456+$456
Yearly cost$9,066$10,918+$1,852
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
$30,000$21,000$6,355$6,724$8,348$8,703
$40,000$28,000$9,066$9,427$10,918$11,570
$60,000$36,000$14,605$14,967$15,202$17,706

Salary is the BLS median for the job ($35,790), capped at 70% of profit. Revenue 2.7 times profit. Single filer.

What matters for hair stylists

What the switch takes in Massachusetts

  1. File the Certificate of Organization with the state: $500 (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 Massachusetts 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 Massachusetts unemployment tax at 2.42% on the first $15,000 of wages. oui.doleta.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, $500 a year, due Anniversary date of the original filing. New for you: Massachusetts corporate excise minimum (S corporation).

Questions

Should a hair stylist in Massachusetts form an S corp?

At $40,000 of profit, not on these figures: the S corp costs $1,852 a year more than staying a sole proprietor.

Is an LLC worth it for a hair stylist in Massachusetts?

For tax, a single-member LLC changes nothing: $9,427 a year against $9,066, the difference being Massachusetts's LLC fees. It separates business liability and is the base for an S corp election.

More

Other professions in Massachusetts
Other states