LLC taxed as S corp vs S corporation in Tennessee: which costs less (2026)

At $100,000 profit in Tennessee, an LLC taxed as an S corp costs $21,055 a year in tax and fees and an S corporation costs $20,825. An S corporation starts to cost less from about $10,000 of profit.

$230 a year

saved by switching from an LLC taxed as an S corp to an S corporation in Tennessee, at these numbers.

Switching from an LLC taxed as an S corp to an S corporation starts to pay at about $10,000 of profit, with the same settings.

Tennessee, 2026: $100,000 profit, single filer

Item	LLC as S corp	S corp	Change
Annual Reportsos.tn.gov, checked Oct 23, 2026	$300	$20	−$280
Payroll tax on your salaryirs.gov, 2026 rates	$6,351	$6,351	$0
Payroll service and tax return (estimate)	$1,800	$1,800	$0
Tennessee franchise taxtn.gov, checked Oct 23, 2026	$100	$100	$0
Tennessee excise taxtn.gov, checked Oct 23, 2026	$3,569	$3,569	$0
Federal income taxirs.gov, 2026 rates	$8,935	$8,985	+$50
Yearly cost	$21,055	$20,825	−$230

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.

Yearly cost at each profit level

Profit	LLC as S corp	S corp	Difference
$30,000	$7,160	$6,902	−$258
$50,000	$10,829	$10,575	−$254
$75,000	$14,698	$14,444	−$254
$100,000	$21,055	$20,825	−$230
$150,000	$35,056	$34,830	−$226
$200,000	$49,877	$49,651	−$226
$300,000	$81,765	$81,557	−$208

Federal and Tennessee tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is S corporation minus LLC taxed as an S corp.

What the switch takes in Tennessee

File the Charter (For-Profit Corporation) with the state: $100 (fee).
Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
State upkeep each year: Annual Report, $20 a year, due 1st day of the 4th month after fiscal year end (April 1 for calendar year).

What changes between the two

Both are taxed the same way by the IRS once the election is made: salary with payroll tax, the rest as a distribution, one Form 1120-S. The difference is state law: an LLC files Articles of Organization (Form SS-4270) and Annual Report, $300 a year, a corporation files Charter (For-Profit Corporation) and Annual Report, $20 a year.

A corporation also has formalities an LLC skips: a board, bylaws, share records and yearly minutes. Most one-person businesses pick the LLC route for that reason.

Questions

How much does it save at $100,000 in Tennessee?

$230 a year: LLC taxed as an S corp $21,055, S corporation $20,825.

Is an LLC taxed as an S corp the same as an S corp?

For federal tax, yes. For Tennessee fees and paperwork, no: the LLC pays Annual Report, $300 a year and the corporation Annual Report, $20 a year.

More for Tennessee

Common cases in Tennessee

Other states