LLC vs S corp in Vermont: which costs less (2026)
At $100,000 profit in Vermont, a single-member LLC costs $26,067 a year in tax and fees and an LLC taxed as an S corp costs $21,930. An LLC taxed as an S corp starts to cost less from about $52,500 of profit.
$4,137 a year
saved by switching from a single-member LLC to an LLC taxed as an S corp in Vermont, at these numbers.
Switching from a single-member LLC to an LLC taxed as an S corp starts to pay at about $52,500 of profit, with the same settings.
Vermont, 2026: $100,000 profit, single filer
| Item | LLC | LLC as S corp | Change |
|---|---|---|---|
| Annual Reportlegislature.vermont.gov, checked Oct 23, 2026 | $45 | $45 | $0 |
| Self-employment taxirs.gov, 2026 rates | $14,123 | $0 | −$14,123 |
| Federal income taxirs.gov, 2026 rates | $8,228 | $9,565 | +$1,337 |
| State income taxtax.vermont.gov, checked Oct 23, 2026 | $3,671 | $3,778 | +$107 |
| Payroll tax on your salaryirs.gov, 2026 rates | $0 | $6,448 | +$6,448 |
| State disability and paid leavetax.vermont.gov, checked Oct 23, 2026 | $0 | $44 | +$44 |
| Payroll service and tax return (estimate) | $0 | $1,800 | +$1,800 |
| Vermont business entity minimum taxtax.vermont.gov, checked Oct 23, 2026 | $0 | $250 | +$250 |
| Yearly cost | $26,067 | $21,930 | −$4,137 |
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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 | LLC as S corp | Difference |
|---|---|---|---|
| $30,000 | $5,716 | $7,432 | +$1,716 |
| $50,000 | $10,887 | $10,987 | +$100 |
| $75,000 | $17,667 | $14,484 | −$3,183 |
| $100,000 | $26,067 | $21,930 | −$4,137 |
| $150,000 | $44,444 | $37,865 | −$6,579 |
| $200,000 | $63,803 | $54,945 | −$8,858 |
| $300,000 | $109,005 | $91,592 | −$17,413 |
Federal and Vermont tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is LLC taxed as an S corp minus Single-member LLC.
What the switch takes in Vermont
- 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
- 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.
- Register with Vermont 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 Vermont unemployment tax at 1% on the first $15,400 of wages. labor.vermont.gov See what payroll costs.
- Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
- State upkeep each year: Annual Report, $45 a year, due within three months after the end of the fiscal year. New for you: Vermont business entity minimum tax.
What changes between the two
A plain LLC pays self-employment tax of 15.3% on 92.35% of all profit, up to the Social Security wage base of $184,500. Taxed as an S corp, the business pays you a salary, and only the salary carries Social Security and Medicare tax. The rest comes out as a distribution.
The election adds costs: a payroll service, a separate business tax return (Form 1120-S), federal and Vermont unemployment tax on the salary, and Vermont business entity minimum tax. The calculator counts $1,800 a year for payroll and the return. The IRS expects a reasonable salary for the work, so it cannot be set near zero.
Questions
At what profit does an S corp election pay in Vermont?
About $52,500 a year, on the default salary (40% of profit, at least $30,000 where profit allows) and $1,800 of yearly payroll and return costs. Change the salary in the calculator to see how the point moves.
How much does it save at $100,000 in Vermont?
$4,137 a year: Single-member LLC $26,067, LLC taxed as an S corp $21,930.
Does Vermont recognise the S corp election?
Yes. No separate state form is needed.
More for Vermont
- All five structures in Vermont
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- Sole proprietorship vs C corp
- LLC taxed as S corp vs S corporation
- What an LLC costs in Vermont
- LLC vs S corp in every state
- Take-home pay in Vermont
- Quarterly estimated tax in Vermont
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