SD · Tax year 2026
LLC vs S-Corp in South Dakota. A localized number.
At $100,000 net profit with a $50,000 W-2 salary, the federal payroll tax delta is $7,680. Adjusted for South Dakota's $0 annual franchise/report fee, the estimated net modeled benefit (yr 1) is $7,680.
LLC Filing Fee
$150
one-time, South Dakota Secretary of State
Annual Franchise / Report
$0
no annual report fee modeled
State Income Tax
No
no individual state-level income tax
Estimated Net Modeled Benefit (yr 1)
$7,680
federal delta minus the annual fee
01 · South Dakota model
Tune the inputs. Numbers update live.
South Dakota annual fee (deducted from savings)
$0
LLC
Federal payroll tax
$14,130
S-CORP
Federal payroll tax
$6,450
Estimated Net Modeled Benefit (yr 1)
$7,680
Federal SE tax saved (LLC vs S-Corp) minus South Dakota's $0 annual fee. The $150 filing fee is not included — it's a one-time setup cost. Income tax, QBI, health insurance, and retirement contributions are not modeled.
02 · Why South Dakota specifically
The state-level numbers that move the answer.
An S-Corp election only pencils out when the federal payroll tax saved outpaces the recurring cost of running a corporate entity. South Dakotacharges $0per year to keep your entity in good standing and does not layer an individual income tax on top of your pass-through income.
At the calculator's default $100K / $50K inputs, the federal delta ($7,680) is what an LLC owner gives up in self-employment tax on net profit. After the South Dakota annual fee, the estimated net modeled benefit is$7,680.
State-specific note: South Dakota has no state individual income tax and no annual report fee for LLCs.
Localized formula
// South Dakota adjusted
llcTax = netProfit × 0.9235 × 0.153
scorpTax = salary × 0.153 − 1200
savings = llcTax − scorpTax − 0- LLC filing: one-time $150 to form the entity in South Dakota.
- Annual franchise / report: $0/yr modeled — confirm with South Dakota Secretary of State whether a filing is required.
- State income tax: not assessed on individual income.