StructureCost2026

LLC or S corp for a web developer in New Mexico (2026)

A web developer in New Mexico with $100,000 of profit pays $25,588 a year in tax and fees as a sole proprietor and $26,428 as an LLC taxed as an S corp, with a $70,000 salary. The S corp starts to pay at about $282,500 of profit.

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

+$840 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 $282,500 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: $100,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$14,130$0−$14,130
Federal income taxirs.gov, 2026 rates$8,235$10,281+$2,046
State income tax, after the PTET creditrealfile.tax.newmexico.gov, checked Oct 20, 2026$3,223$1,875−$1,348
Payroll tax on your salaryirs.gov, 2026 rates$0$11,100+$11,100
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$1,322+$1,322
Yearly cost$25,588$26,428+$840
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
$70,000$49,000$16,235$16,235$16,636$19,101
$100,000$70,000$25,588$25,588$26,428$30,809
$150,000$93,000$43,107$43,107$41,692$50,727

Salary is the BLS median for the job ($92,650), capped at 70% of profit. Revenue 2.2 times profit. Single filer.

What matters for web developers

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 web developer in New Mexico form an S corp?

At $100,000 of profit, not on these figures: the S corp costs $840 a year more than staying a sole proprietor.

Is an LLC worth it for a web developer in New Mexico?

For tax, a single-member LLC changes nothing: $25,588 a year against $25,588, 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