StructureCost2026

LLC or S corp for a freelance writer in Tennessee (2026)

A freelance writer in Tennessee with $80,000 of profit pays $16,648 a year in tax and fees as a sole proprietor and $18,479 as an LLC taxed as an S corp, with a $56,000 salary. The S corp starts to pay at about $302,500 of profit.

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

+$1,831 a year

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

Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $302,500 of profit, with the same settings. Setting up costs $300 once in state filing fees.

Tennessee, 2026: $80,000 profit, single filer

ItemSole propLLC as S corpChange
Self-employment taxirs.gov, 2026 rates$11,304$0−$11,304
Federal income taxirs.gov, 2026 rates$5,344$6,330+$986
Annual Reportsos.tn.gov, checked Oct 23, 2026$0$300+$300
Payroll tax on your salaryirs.gov, 2026 rates$0$8,799+$8,799
Payroll service and tax return (estimate)$0$1,800+$1,800
Tennessee franchise taxtn.gov, checked Oct 23, 2026$0$100+$100
Tennessee excise taxtn.gov, checked Oct 23, 2026$0$1,150+$1,150
Yearly cost$16,648$18,479+$1,831
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
$60,000$42,000$12,037$15,346$13,653$14,893
$80,000$56,000$16,648$20,956$18,479$20,495
$120,000$77,000$28,461$34,162$30,304$35,182

Salary is the BLS median for the job ($76,910), capped at 70% of profit. Revenue 2.5 times profit. Single filer.

What matters for freelance writers

What the switch takes in Tennessee

  1. File the Articles of Organization (Form SS-4270) with the state: $300 (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. Tennessee does not follow the S election: the state taxes the company as a corporation, which the figures above include.
  6. Register with Tennessee 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 Tennessee unemployment tax at 2.7% on the first $7,000 of wages. tn.gov See what payroll costs.
  7. Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
  8. State upkeep each year: Annual Report, $300 a year, due 1st day of the 4th month after fiscal year end (April 1 for calendar year). New for you: Tennessee franchise tax, Tennessee excise tax.

Questions

Should a freelance writer in Tennessee form an S corp?

At $80,000 of profit, not on these figures: the S corp costs $1,831 a year more than staying a sole proprietor.

Is an LLC worth it for a freelance writer in Tennessee?

For tax, a single-member LLC changes nothing: $20,956 a year against $16,648, the difference being Tennessee's LLC fees and LLC taxes. It separates business liability and is the base for an S corp election.

More

Other professions in Tennessee
Other states