StructureCost2026

LLC or S corp for a marketing consultant in Minnesota (2026)

A marketing consultant in Minnesota with $90,000 of profit pays $23,480 a year in tax and fees as a sole proprietor and $24,951 as an LLC taxed as an S corp, with a $63,000 salary. The S corp starts to pay at about $287,500 of profit.

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

+$1,471 a year

more for an LLC taxed as an S corp than a sole proprietorship in Minnesota, 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 $155 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.

Minnesota, 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$8,095+$1,496
State income tax, after the PTET creditrevenue.state.mn.us, checked Oct 23, 2026$4,164$2,172−$1,992
Payroll tax on your salaryirs.gov, 2026 rates$0$10,704+$10,704
State disability and paid leavedli.mn.gov, checked Oct 23, 2026$0$277+$277
Payroll service and tax return (estimate)$0$1,800+$1,800
Minnesota pass-through entity tax, paid by the company (elected)revenue.state.mn.us, checked Oct 23, 2026$0$1,903+$1,903
Yearly cost$23,480$24,951+$1,471
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$14,305$14,305$15,405$17,722
$90,000$63,000$23,480$23,480$24,951$29,203
$130,000$79,000$38,202$38,202$37,294$46,486

Salary is the BLS median for the job ($78,760), capped at 70% of profit. Revenue 2.9 times profit. Single filer.

What matters for marketing consultants

What the switch takes in Minnesota

  1. File the Articles of Organization (Chapter 322C) with the state: $155 (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 Minnesota 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 Minnesota unemployment tax at 1.596% on the first $44,000 of wages. house.mn.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 Renewal, no fee, due December 31. New for you: Minnesota minimum fee.

Questions

Should a marketing consultant in Minnesota form an S corp?

At $90,000 of profit, not on these figures: the S corp costs $1,471 a year more than staying a sole proprietor.

Is an LLC worth it for a marketing consultant in Minnesota?

For tax, a single-member LLC changes nothing: $23,480 a year against $23,480, the difference being Minnesota's LLC fees and LLC taxes. It separates business liability and is the base for an S corp election.

More

Other professions in Minnesota
Other states