StructureCost2026

LLC vs S corp in Virginia: which costs less (2026)

At $100,000 profit in Virginia, a single-member LLC costs $26,926 a year in tax and fees and an LLC taxed as an S corp costs $21,920. An LLC taxed as an S corp starts to cost less from about $50,000 of profit.

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

$5,006 a year

saved by switching from a single-member LLC to an LLC taxed as an S corp in Virginia, at these numbers.

Switching from a single-member LLC to an LLC taxed as an S corp starts to pay at about $50,000 of profit, with the same settings. As an LLC taxed as an S corp this uses the state's pass-through entity tax election, which lowers the cost here.

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

ItemLLCLLC as S corpChange
Annual Registration Feelaw.lis.virginia.gov, checked Oct 23, 2026$50$50$0
Self-employment taxirs.gov, 2026 rates$14,122$0−$14,122
Federal income taxirs.gov, 2026 rates$8,227$9,068+$841
State income tax, after the PTET creditlaw.lis.virginia.gov, checked Oct 23, 2026$4,527$1,486−$3,041
Payroll tax on your salaryirs.gov, 2026 rates$0$6,362+$6,362
Payroll service and tax return (estimate)$0$1,800+$1,800
Virginia pass-through entity tax, paid by the company (elected)tax.virginia.gov, checked Oct 23, 2026$0$3,154+$3,154
Yearly cost$26,926$21,920−$5,006
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

ProfitLLCLLC as S corpDifference
$30,000$6,007$7,399+$1,392
$50,000$11,626$11,324−$302
$75,000$18,724$15,023−$3,701
$100,000$26,926$21,920−$5,006
$150,000$44,841$36,910−$7,931
$200,000$63,341$52,709−$10,632
$300,000$107,687$86,655−$21,032

Federal and Virginia 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 Virginia

  1. 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
  2. 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.
  3. Register with Virginia 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 Virginia unemployment tax at 2.5% on the first $8,000 of wages. law.lis.virginia.gov See what payroll costs.
  4. Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
  5. State upkeep each year: Annual Registration Fee, $50 a year, due Last day of the anniversary month of formation.

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 Virginia unemployment tax on the salary. 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 Virginia?

About $50,000 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 Virginia?

$5,006 a year: Single-member LLC $26,926, LLC taxed as an S corp $21,920.

Does Virginia recognise the S corp election?

Yes. No separate state form is needed.

More for Virginia

Common cases in Virginia

Other states