LLC vs S-Corp — Tax Differences for Small Business
S-Corp election shifts profit from self-employment tax to payroll plus distributions. The break-even is usually around $50K-$80K profit.
Default LLC taxation runs all profit through self-employment tax (15.3% on the first $168,600 of 2026 wage base). S-Corp election pays the owner reasonable wages (subject to payroll tax) and distributes the rest free of SE tax.
Frequently Asked Questions
More in IRS & Financial
What Is an IRS Installment Agreement?
An IRS Installment Agreement lets you pay back taxes in monthly payments. Here are the types, eligibility rules, fees, and how to apply.
How Does an Offer in Compromise Work?
An Offer in Compromise lets you settle IRS tax debt for less than you owe — but only if you genuinely cannot pay in full. Here is how the IRS evaluates an offer.
How to Stop an IRS Wage Garnishment
An IRS wage garnishment can take up to 85% of your paycheck. Here's how to get it released — sometimes within days.
Ready to get started?
Talk with our team — we'll prepare every form, file with the right agency, and walk you through the process.