StructureCost2026

LLC or S corp for a management consultant in New Mexico (2026)

A management consultant in New Mexico with $110,000 of profit pays $29,092 a year in tax and fees as a sole proprietor and $29,910 as an LLC taxed as an S corp, with a $77,000 salary. The S corp starts to pay at about $272,500 of profit.

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

+$818 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $272,500 of profit, with the same settings. Setting up costs $50 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.

New Mexico, 2026: $110,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$15,543$0−$15,543
Federal income taxirs.gov, 2026 rates$9,871$12,229+$2,358
State income tax, after the PTET creditrealfile.tax.newmexico.gov, checked Oct 20, 2026$3,678$2,193−$1,485
Payroll tax on your salaryirs.gov, 2026 rates$0$12,171+$12,171
Payroll service and tax return (estimate)$0$1,800+$1,800
New Mexico corporate franchise taxtax.newmexico.gov, checked Oct 20, 2026$0$50+$50
New Mexico pass-through entity tax, paid by the company (elected)tax.newmexico.gov, checked Oct 20, 2026$0$1,467+$1,467
Yearly cost$29,092$29,910+$818
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
$80,000$56,000$18,977$18,977$19,480$22,553
$110,000$77,000$29,092$29,092$29,910$34,760
$160,000$102,000$46,619$46,619$45,741$54,651

Salary is the BLS median for the job ($101,860), capped at 70% of profit. Revenue 1.7 times profit. Single filer.

What matters for management consultants

What the switch takes in New Mexico

  1. File the Articles of Organization with the state: $50 (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 New Mexico 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 New Mexico unemployment tax at 1% on the first $34,800 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: no yearly report fee, due no report required. New for you: New Mexico corporate franchise tax.

Questions

Should a management consultant in New Mexico form an S corp?

At $110,000 of profit, not on these figures: the S corp costs $818 a year more than staying a sole proprietor.

Is an LLC worth it for a management consultant in New Mexico?

For tax, a single-member LLC changes nothing: $29,092 a year against $29,092, the difference being New Mexico's LLC fees. It separates business liability and is the base for an S corp election.

More

Other professions in New Mexico
Other states