StructureCost2026

LLC vs S corp in Massachusetts: which costs less (2026)

At $100,000 profit in Massachusetts, a single-member LLC costs $27,116 a year in tax and fees and an LLC taxed as an S corp costs $23,171. An LLC taxed as an S corp starts to cost less from about $55,000 of profit.

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

$3,945 a year

saved by switching from a single-member LLC to an LLC taxed as an S corp in Massachusetts, at these numbers.

Switching from a single-member LLC to an LLC taxed as an S corp starts to pay at about $55,000 of profit, with the same settings. 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: $100,000 profit, single filer

ItemLLCLLC as S corpChange
Annual Reportsec.state.ma.us, checked Oct 23, 2026$500$500$0
Self-employment taxirs.gov, 2026 rates$14,059$0−$14,059
Federal income taxirs.gov, 2026 rates$8,153$8,960+$807
State income tax, after the PTET creditmass.gov, checked Oct 23, 2026$4,404$2,049−$2,355
Payroll tax on your salaryirs.gov, 2026 rates$0$6,533+$6,533
State disability and paid leavemass.gov, checked Oct 23, 2026$0$184+$184
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$2,689+$2,689
Yearly cost$27,116$23,171−$3,945
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.

Yearly cost at each profit level

ProfitLLCLLC as S corpDifference
$30,000$6,724$8,851+$2,127
$50,000$12,197$12,719+$522
$75,000$19,122$16,369−$2,753
$100,000$27,116$23,171−$3,945
$150,000$44,683$38,063−$6,620
$200,000$62,843$53,775−$9,068
$300,000$106,290$87,559−$18,731

Federal and Massachusetts tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is LLC taxed as an S corp minus Single-member LLC.

What the switch takes in Massachusetts

  1. 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
  2. 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.
  3. 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.
  4. Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
  5. 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).

What changes between the two

A plain LLC pays self-employment tax of 15.3% on 92.35% of all profit, up to the Social Security wage base of $184,500. Taxed as an S corp, the business pays you a salary, and only the salary carries Social Security and Medicare tax. The rest comes out as a distribution.

The election adds costs: a payroll service, a separate business tax return (Form 1120-S), federal and Massachusetts unemployment tax on the salary, and Massachusetts corporate excise minimum (S corporation). The calculator counts $1,800 a year for payroll and the return. The IRS expects a reasonable salary for the work, so it cannot be set near zero.

Questions

At what profit does an S corp election pay in Massachusetts?

About $55,000 a year, on the default salary (40% of profit, at least $30,000 where profit allows) and $1,800 of yearly payroll and return costs. Change the salary in the calculator to see how the point moves.

How much does it save at $100,000 in Massachusetts?

$3,945 a year: Single-member LLC $27,116, LLC taxed as an S corp $23,171.

Does Massachusetts recognise the S corp election?

Yes. No separate state form is needed.

More for Massachusetts

Common cases in Massachusetts

Other states