LLC vs S-Corp: the short answer S-Corp is a tax election, not a business entity. An LLC remains an LLC legally when it elects S-Corp status. The election saves SE tax by splitting profit between a W-2 salary (taxed at 15.3% FICA) and distributions (not subject to SE tax). 2026 SS wage base: $184,500 (IRS). SE tax rate: 15.3%. S-Corp compliance costs: $1,500–$4,000/year. Break-even: approximately $60,000–$80,000 net profit. Form 2553 deadline for calendar-year businesses: March 15. Late election relief available under Rev. Proc. 2013-30.
LLC vs S-Corp: Which Is Better and When to Switch (2026)
Want the dollar figures? See S-Corp tax savings by income level.
