LLC or S corp for a real estate agent in Montana (2026)

A real estate agent in Montana with $60,000 of profit pays $13,901 a year in tax and fees as a sole proprietor and $14,590 as an LLC taxed as an S corp, with a $42,000 salary. The S corp starts to pay at about $282,500 of profit.

+$689 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $282,500 of profit, with the same settings. Setting up costs $35 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.

Montana, 2026: $60,000 profit, single filer

Item	Sole prop	LLC as S corp	Change
Self-employment taxirs.gov, 2026 rates	$8,478	$0	−$8,478
Federal income taxirs.gov, 2026 rates	$3,559	$3,984	+$425
State income tax, after the PTET creditrevenue.mt.gov, checked Oct 23, 2026	$1,864	$1,099	−$765
Payroll tax on your salaryirs.gov, 2026 rates	$0	$7,006	+$7,006
Payroll service and tax return (estimate)	$0	$1,800	+$1,800
Montana pass-through entity tax, paid by the company (elected)news.bloombergtax.com, checked Oct 23, 2026	$0	$701	+$701
Yearly cost	$13,901	$14,590	+$689

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

Profit	Salary used	Sole prop	LLC	LLC as S corp	C corp
$40,000	$28,000	$8,417	$8,417	$9,278	$10,655
$60,000	$42,000	$13,901	$13,901	$14,590	$16,721
$80,000	$53,000	$19,488	$19,488	$19,582	$23,119

Salary is the BLS median for the job ($52,830), capped at 70% of profit. Revenue 2.4 times profit. Single filer.

What matters for real estate agents

This work is not a specified service trade or business, so the 20% QBI deduction stays available above the income limit, subject to the wage limit. Treas. Reg. 1.199A-5(b)(2)(x) says brokerage services do not include services provided by real estate agents and brokers. law.cornell.edu
Licensed agents paid on commission are statutory nonemployees under IRC 3508, and some states let an agent's commission be paid to an LLC or corporation only if the state's real estate commission allows it. law.cornell.edu

What the switch takes in Montana

File the Articles of Organization with the state: $35 (fee).
Get an EIN from the IRS (free, online) and open a business bank account in the new name.
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
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.
Register with Montana 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 Montana unemployment tax at 1.1% on the first $47,300 of wages. uid.dli.mt.gov See what payroll costs.
Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
State upkeep each year: Annual Report, no fee, due April 15.

Questions

Should a real estate agent in Montana form an S corp?

At $60,000 of profit, not on these figures: the S corp costs $689 a year more than staying a sole proprietor.

Is an LLC worth it for a real estate agent in Montana?

For tax, a single-member LLC changes nothing: $13,901 a year against $13,901, the difference being Montana's LLC fees. It separates business liability and is the base for an S corp election.

Other professions in Montana

Other states