LLC vs C corp in Texas: which costs less (2026)

At $100,000 profit in Texas, a single-member LLC costs $22,365 a year in tax and fees and a C corporation costs $25,147. A C corporation starts to cost less from about $475,000 of profit.

+$2,782 a year

more for a C corporation than a single-member LLC in Texas, at these numbers.

Switching from a single-member LLC to a C corporation starts to pay at about $475,000 of profit, with the same settings.

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

Item	LLC	C corp	Change
Self-employment taxirs.gov, 2026 rates	$14,130	$0	−$14,130
Federal income taxirs.gov, 2026 rates	$8,235	$5,264	−$2,971
Payroll tax on your salaryirs.gov, 2026 rates	$0	$6,405	+$6,405
Payroll service and tax return (estimate)	$0	$2,000	+$2,000
Federal corporate income tax (21%)irs.gov, 2026 rates	$0	$11,478	+$11,478
Yearly cost	$22,365	$25,147	+$2,782

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	C corp	Difference
$30,000	$5,181	$7,142	+$1,961
$50,000	$9,732	$11,533	+$1,801
$75,000	$15,495	$16,783	+$1,288
$100,000	$22,365	$25,147	+$2,782
$150,000	$37,607	$42,959	+$5,352
$200,000	$53,430	$59,954	+$6,524
$300,000	$92,125	$95,598	+$3,473

Federal and Texas tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is C corporation minus Single-member LLC.

What the switch takes in Texas

Either convert the LLC to a corporation under state law, or keep the LLC and elect corporate tax treatment with IRS Form 8832.
Register with Texas 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 Texas unemployment tax at 2.7% on the first $9,000 of wages. twc.texas.gov See what payroll costs.
Federal return each year: Form 1120, due April 15 for a calendar year.
State upkeep each year: Franchise Tax Public Information Report, no fee, due May 15.

What changes between the two

A C corporation pays 21% federal tax on its profit, and the owner pays tax again on dividends (the double tax). An LLC pays no federal income tax itself: profit lands on the owner's return, where the 20% qualified business income deduction can apply.

The figures assume all C corp profit after tax is paid out as dividends. Profit kept in the company to grow it is taxed only at the corporate rate until it is paid out, which is where a C corp can come out ahead.

Questions

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

Nothing. C corporation costs $2,782 a year more ($25,147 against $22,365).

When does a C corp make sense in Texas?

Mostly when profit stays in the company, when outside investors need one, or for the qualified small business stock exclusion. For an owner who takes the profit out, the second tax on dividends usually costs more. On these figures the C corp costs less from about $475,000.

More for Texas

Common cases in Texas

Other states