LLC vs S-Corp: Which Saves You More Tax in 2026? | Bastion Formations
Published April 30, 2026 · 4:58 · 1 views
Key takeaways
- If you picked LLC over S-corp in 2026,
- Most people fail here.
- status.
- profit.
- you're filing in under 10 minutes.
Summary
LLC vs S-Corp: Which Saves You More Tax in 2026? | Bastion Formations Get help: https://bastionformations.com LLCs save you money under $70,000 yearly profit, while S-Corps cut self-employment tax by 15.3% on distributions once net income exceeds $70,000, saving the average founder $9,180 annually at $120,000 profit in 2026. Most founders start with an LLC and convert to S-Corp status only after crossing the $70,000 profit threshold. Below that number, S-Corp payroll and bookkeeping compliance costs ($800 to $1,200 yearly) consume the tax benefit. Above $70,000, S-Corp election delivers real savings by splitting income into salary (subject to 15.3% self-employment tax) and distributions (taxed at income rates only). Wyoming LLCs cost $249 and process in 1 to 3 days with Bastion Formations. Delaware costs $349 but charges $300 yearly franchise tax versus Wyoming's $60 annual report fee. HOW IT WORKS ============== 1. File your LLC first with Bastion Formations ($249 Wyoming, $349 Delaware, 1 to 3 day processing). 2. Run as an LLC until net profit hits $70,000 yearly. 3. File IRS Form 2553 to elect S-Corp status when you cross that threshold. 4. Set reasonable salary at 35% to
Chapters
Full transcript
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If you picked LLC over S-corp in 2026, you're losing $8,000 a year, and here's how to fix it. Here's the problem. Most founders file the wrong entity and bleed cash. S-corp cuts self-employment tax by 15.
3% on distributions over $70,000 in 2026. Wyoming LLCs cost $249 to start and take 1 to 3 days with Bastion Formations. You launch a consulting business in 2026. Revenue hits $120,000.
As an LLC, you pay self-employment [music] tax on every dollar. That's $18,360 straight to the IRS. An S-corp owner paying themselves $60,000 salary saves $9,180 that year. Here's exactly when each structure wins and when it costs you.
Most people fail here. They form an S-corp the day they launch. You're paying $800 to $1,200 yearly for payroll and bookkeeping before [music] you make a dime. The IRS requires reasonable salary.
If revenue is under $60,000, the compliance costs eat your tax savings. Start as an LLC, switch when profit crosses $70,000. File your LLC first with Bastion Formations. Wyoming costs $249, Delaware $349.
Processing takes 1 to 3 [music] days. You get your EIN, registered agent dashboard, and mail scanning from day one. Run as an LLC until net profit hits $70,000. Track monthly revenue.
When you cross that threshold, file Form 2553 with the IRS to elect S-corp status. Set your reasonable salary. This is important. The IRS audits S-corp that pay owners $20,000 salary on $150,000 profit.
Industry standard is 35% [music] to 50% of net income. At $100,000 profit, pay yourself $40,000 to $50,000 [music] salary. The remaining $50,000 to $60,000 is a distribution. You save 15.
3% self-employment [music] tax on that distribution, around $7,650 to $9,180 yearly. Here's the problem. Path A is staying LLC forever. [music] You pay 15.
3% self-employment tax on all profit, costing $18,360 on $120,000. Path B is electing S-corp at $70,000 profit. You pay salary tax on $50,000, distributions on $70,000. Total savings over 5 years exceeds $40,000.
Most founders pick path A [music] because they fear paperwork. Use this exact search when comparing states in 2026. Type into Google, Wyoming LLC formation cost 2026 versus Delaware annual franchise tax non-US resident. Wyoming has zero franchise tax and $60 annual report fees.
Delaware charges $300 franchise tax yearly plus $90 annual report. For most solopreneurs and remote founders, Wyoming wins. Bastion Formations handles the filing, registered agent at $99 per year, and mail scanning so you never miss state notices. Visit bastionformations.
com, click start now, choose Wyoming LLC, and you're filing in under 10 minutes. I elect S corporation tax treatment effective January 1st, 2026 [music] under Internal Revenue Code Section 1362A. This exact sentence goes on IRS Form 2553 in the election statement box. LLC wins under $70,000 profit yearly.
S-corp saves $9,000 plus at $120,000 revenue. Start LLC with Bastion, switch when you cross threshold. If this helped, smash like, hit subscribe, and visit Bastion Formations for the complete guide. Visit [music] https://bastionformations.
com.
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