StructureCost2026

LLC vs S corp for physicians (2026)

At $270,000 of profit, an S corp election saves a physician money over a sole proprietorship in 4 of 51 states, with a $189,000 salary. Pick your state for the calculator with these numbers filled in.

StateSole proprietorS corpSaving
New Hampshire$85,502$84,062$1,440
South Carolina$90,807$90,118$689
Maryland$91,941$91,654$287
District of Columbia$102,619$102,613$6
Virginia$93,117$93,302+$185
New Mexico$90,722$90,964+$242
Kansas$92,698$92,960+$262
Alabama$91,754$92,090+$336
Nebraska$90,168$90,552+$384
Georgia$91,245$91,648+$403
Missouri$90,317$90,721+$404
Montana$92,316$92,746+$430
Mississippi$88,738$89,171+$433
West Virginia$90,059$90,533+$474
Idaho$91,676$92,192+$516
Michigan$89,856$90,397+$541
Oklahoma$90,199$90,767+$568
Arkansas$88,534$89,215+$681
Utah$90,617$91,308+$691
Iowa$88,348$89,056+$708
Louisiana$86,535$87,260+$725
Kentucky$88,077$88,836+$759
Indiana$86,763$87,596+$833
New York$93,573$94,432+$859
Arizona$85,252$86,127+$875
North Carolina$88,936$89,838+$902
Illinois$91,747$92,918+$1,171
Maine$95,421$96,815+$1,394
Texas$79,272$80,783+$1,511
Wisconsin$91,404$92,936+$1,532
South Dakota$79,272$80,832+$1,560
Florida$79,272$80,839+$1,567
Connecticut$92,618$94,225+$1,607
Delaware$94,896$96,549+$1,653
North Dakota$82,963$84,624+$1,661
Pennsylvania$87,099$88,796+$1,697
Minnesota$96,195$98,038+$1,843
Wyoming$79,272$81,170+$1,898
Rhode Island$90,425$92,398+$1,973
Alaska$79,294$81,316+$2,022
Vermont$94,861$96,972+$2,111
Massachusetts$91,799$94,003+$2,204
Colorado$89,781$92,054+$2,273
Nevada$79,362$81,718+$2,356
New Jersey$93,322$95,934+$2,612
Ohio$79,420$82,074+$2,654
California$96,955$101,314+$4,359
Tennessee$79,272$83,799+$4,527
Oregon$98,490$103,809+$5,319
Hawaii$105,480$111,773+$6,293
Washington$82,780$89,459+$6,679

Yearly federal and state tax and fees at $270,000 profit and $540,000 revenue, single filer, $1,800 a year of payroll and return costs.

Questions

Should a physician form an S corp?

At $270,000 of profit and a $189,000 salary, an LLC taxed as an S corp costs less than a sole proprietorship in 4 of 51 states. The biggest saving is in New Hampshire ($1,440 a year), and in Washington it costs $6,679 more.

What salary should a physician pay themselves?

The IRS expects pay in line with what the work would earn an employee. The median for employees in this job is $244,180 (BLS, May 2025). The figures here use that, capped at 70% of profit. More on reasonable salary.

Other professions