LLC vs S corp for real estate agents (2026)
At $60,000 of profit, an S corp election saves a real estate agent money over a sole proprietorship in 1 of 51 states, with a $42,000 salary. Pick your state for the calculator with these numbers filled in.
- 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
- Median pay for employees in this job: $52,830 (BLS, May 2025).
| State | Sole proprietor | S corp | Saving |
|---|---|---|---|
| District of Columbia | $16,395 | $15,975 | $420 |
| South Carolina | $13,195 | $13,410 | +$215 |
| Nebraska | $13,871 | $14,220 | +$349 |
| Louisiana | $13,325 | $13,689 | +$364 |
| Alabama | $14,560 | $14,976 | +$416 |
| Missouri | $13,720 | $14,142 | +$422 |
| Arizona | $13,037 | $13,461 | +$424 |
| Virginia | $14,429 | $14,858 | +$429 |
| Mississippi | $13,535 | $13,971 | +$436 |
| Iowa | $13,544 | $14,009 | +$465 |
| Michigan | $14,156 | $14,634 | +$478 |
| Kansas | $14,349 | $14,831 | +$482 |
| West Virginia | $13,724 | $14,211 | +$487 |
| Indiana | $13,652 | $14,148 | +$496 |
| Georgia | $14,071 | $14,574 | +$503 |
| Arkansas | $13,929 | $14,439 | +$510 |
| Texas | $12,037 | $12,590 | +$553 |
| Kentucky | $13,871 | $14,428 | +$557 |
| New Mexico | $13,492 | $14,057 | +$565 |
| Oklahoma | $14,001 | $14,588 | +$587 |
| Idaho | $13,884 | $14,494 | +$610 |
| South Dakota | $12,037 | $12,658 | +$621 |
| Florida | $12,037 | $12,667 | +$630 |
| Maryland | $14,320 | $14,956 | +$636 |
| Utah | $14,518 | $15,175 | +$657 |
| Pennsylvania | $13,749 | $14,426 | +$677 |
| Wisconsin | $13,709 | $14,396 | +$687 |
| Montana | $13,901 | $14,590 | +$689 |
| North Dakota | $12,037 | $12,796 | +$759 |
| Delaware | $14,619 | $15,418 | +$799 |
| Maine | $14,123 | $14,938 | +$815 |
| Vermont | $13,471 | $14,335 | +$864 |
| Illinois | $14,652 | $15,519 | +$867 |
| North Carolina | $13,753 | $14,649 | +$896 |
| Ohio | $12,037 | $12,948 | +$911 |
| Alaska | $12,076 | $13,051 | +$975 |
| Connecticut | $13,621 | $14,638 | +$1,017 |
| New York | $14,451 | $15,535 | +$1,084 |
| Wyoming | $12,037 | $13,122 | +$1,085 |
| Minnesota | $14,305 | $15,405 | +$1,100 |
| Colorado | $13,782 | $15,198 | +$1,416 |
| Rhode Island | $13,511 | $14,990 | +$1,479 |
| New Hampshire | $12,037 | $13,538 | +$1,501 |
| California | $13,575 | $15,190 | +$1,615 |
| Tennessee | $12,037 | $13,653 | +$1,616 |
| Massachusetts | $14,605 | $16,224 | +$1,619 |
| Oregon | $16,342 | $17,964 | +$1,622 |
| Nevada | $12,191 | $13,826 | +$1,635 |
| Washington | $13,700 | $15,562 | +$1,862 |
| Hawaii | $18,524 | $20,555 | +$2,031 |
| New Jersey | $13,570 | $15,872 | +$2,302 |
Yearly federal and state tax and fees at $60,000 profit and $144,000 revenue, single filer, $1,800 a year of payroll and return costs.
Questions
Should a real estate agent form an S corp?
At $60,000 of profit and a $42,000 salary, an LLC taxed as an S corp costs less than a sole proprietorship in 1 of 51 states. The biggest saving is in District of Columbia ($420 a year), and in New Jersey it costs $2,302 more.
What salary should a real estate agent pay themselves?
The IRS expects pay in line with what the work would earn an employee. The median for employees in this job is $52,830 (BLS, May 2025). The figures here use that, capped at 70% of profit. More on reasonable salary.
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