StructureCost2026

LLC or S corp for a lawyer in Massachusetts (2026)

A lawyer in Massachusetts with $180,000 of profit pays $55,202 a year in tax and fees as a sole proprietor and $57,860 as an LLC taxed as an S corp, with a $126,000 salary. The S corp starts to pay at about $287,500 of profit.

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

+$2,658 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 $287,500 of profit, with the same settings. Setting up costs $500 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.

Massachusetts, 2026: $180,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$25,433$0−$25,433
Federal income taxirs.gov, 2026 rates$21,625$26,487+$4,862
State income tax, after the PTET creditmass.gov, checked Oct 23, 2026$8,144$6,286−$1,858
Annual Reportsec.state.ma.us, checked Oct 23, 2026$0$500+$500
Payroll tax on your salaryirs.gov, 2026 rates$0$19,691+$19,691
State disability and paid leavemass.gov, checked Oct 23, 2026$0$580+$580
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
Massachusetts pass-through entity tax, paid by the company (elected)bakertilly.com, checked Oct 23, 2026$0$2,060+$2,060
Yearly cost$55,202$57,860+$2,658
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
$120,000$84,000$33,817$34,143$35,904$40,707
$180,000$126,000$55,202$55,520$57,860$64,941
$260,000$160,000$85,602$85,783$85,438$99,159

Salary is the BLS median for the job ($159,670), capped at 70% of profit. Revenue 2.1 times profit. Single filer.

What matters for lawyers

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 lawyer in Massachusetts form an S corp?

At $180,000 of profit, not on these figures: the S corp costs $2,658 a year more than staying a sole proprietor.

Is an LLC worth it for a lawyer in Massachusetts?

For tax, a single-member LLC changes nothing: $55,520 a year against $55,202, 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