CO · Tax year 2026 · Last reviewed 2026-08-24
LLC vs S Corp in Colorado: Tax Savings Calculator.
Compare federal payroll taxes, self-employment taxes, Colorado ’s $10 annual fee and estimated S Corp savings in seconds.
At $100,000 net profit with a $50,000 W-2 salary, the federal payroll tax delta is $10,305. Adjusted for Colorado's recurring cost, the estimated net modeled benefit (yr 1) is$9,095.
LLC Filing Fee
$50
one-time, Colorado Secretary of State
Annual Franchise / Report (LLC)
$10
recurring, every year
S-Corp Recurring Cost
$10
same as the LLC rate
Estimated Net Modeled Benefit (yr 1)
$9,095
federal delta minus the annual fee
01 · Colorado model
Tune the inputs. Numbers update live.
What does this mean? Your expected business profit for the year after business expenses but before the owner's salary.
The IRS requires "reasonable compensation" for S-Corp shareholder-employees. The salary is capped at your current net profit.
This is an illustrative assumption, not a tax or an IRS-required amount. Real overhead depends on your payroll provider, your CPA, and your state.
Per IRS Form 8959, these are added to your business income to determine whether the 0.9% Additional Medicare Tax applies.
Sets the Form 8959 threshold: $200K (single / HOH), $250K (MFJ), $125K (MFS).
Colorado LLC recurring fee (deducted from savings)
$10
Recurring state filing/maintenance fee.
Defaults: $100K profit · $50K salary
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LLC
Federal payroll tax
$14,130
S-CORP
Federal payroll tax
$3,825
Federal Payroll / SE Tax Difference
$10,305
LLC SE tax minus the S-Corp's employer-side FICA on the owner salary. This is the federal payroll-tax piece only.
Estimated Net Modeled Benefit (yr 1)
$9,095
- Federal payroll-tax delta
- $10,305
- − Colorado annual fee
- $10,295
- − Modeled S-Corp admin overhead
- $1,200
- = Estimated net modeled benefit
- $9,095
- − Approx. §199A W-2 drag
- $0
- = Net after QBI drag
- $9,095
Federal delta = the LLC's self-employment tax minus the S-Corp's employer-side payroll tax. The S-Corp employer-side figure ishalf of the standard 12.4% + 2.9% FICA on the salary; the 0.9% Additional Medicare Tax is entirely employee-side (no employer match) and is not included in the S-Corp employer-side comparison. The $50 filing fee is not included — it's a one-time setup cost. Income tax, QBI, health insurance, and retirement contributions are not modeled.
Estimate. Methodology & scope
ESTIMATE. The figures above estimate the federal payroll / self-employment tax difference between a Single-Member LLC (Schedule C / Schedule SE) and an S-Corp election, plus Colorado's $10 LLC annual franchise / report fee and the $10 modeled S-Corp recurring cost and the one-time $50 Colorado LLC filing fee (setup cost, not deducted from the year-1 net benefit). They do not include federal or Colorado individual income tax (the state-income-tax flag is informational; the dollar amount is not modeled), the §199A QBI deduction (made permanent under the One Big Beautiful Bill Act, H.R. 1 / Public Law 119-21, signed July 4, 2025, with a 2026 phase-in range of $200K–$275K single / $400K–$550K MFJ), self-employed health insurance, retirement contributions, the half-of-SE-tax Schedule 1 adjustment, filing-status-specific deductions or credits, multi-state apportionment, reasonable-compensation enforcement, or other items that depend on your complete tax situation. The S-Corp administration overhead is a configurable illustrative assumption (defaulted to $1,200/yr), not a tax and not an IRS-required amount. Verify with a licensed CPA, EA, or tax attorney before acting.
02 · Why Colorado 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. Coloradocharges $10per year to keep your entity in good standing and assesses ordinary state income tax on top of the federal figure.
At the calculator's default $100K / $50K inputs, the federal delta ($10,305) is what an LLC owner gives up in self-employment tax on net profit. After the Colorado annual fee, the estimated net modeled benefit is$9,095.
State-specific note: Colorado Periodic Report is $10 per year for LLCs.
Localized formula — how this number was calculated
// Colorado — same engine as the homepage
seBase = netProfit × 0.9235
ssPortion = min(seBase, 184_500) × 0.124
medicare = seBase × 0.029
addlMed = max(0, seBase + existingWages − 200_000) × 0.009
llcTax = ssPortion + medicare + addlMed
// S-Corp — employer-side payroll tax only
ssPortion = min(salary, 184_500) × 0.124
medicare = salary × 0.029
standard = ssPortion + medicare
addlMed = max(0, salary + existingWages − 200_000) × 0.009
// employee-side only — no employer match
scorpTax = standard / 2 // 50% of standard FICA — AddlMed excluded
// Net benefit
payrollDelta = llcTax − scorpTax
netOfFee = max(0, payrollDelta − 10)
savings = max(0, netOfFee − 1200) // $1,200 admin overhead- LLC filing: one-time $50 to form the entity in Colorado.
- Annual franchise / report: $10/yr to maintain good standing.
- State income tax: applies on top of federal ordinary rates; not modeled.
03 · FAQ
LLC vs S Corp in Colorado — frequently asked questions
Common questions about choosing between an LLC and S Corp in Colorado, sourced from Google, Reddit, and Quora. The right answer depends on your income, reasonable compensation, and other factors — talk to a CPA for personal advice.
How much does it cost to form an LLC in Colorado?
Colorado charges a $50 filing fee to form an LLC. The annual periodic report fee is just $10/year — one of the lowest in the country.
Does Colorado have a state income tax?
Yes. Colorado imposes a flat individual income tax rate of 4.4% (as of 2025). This applies to both LLC pass-through income and S-Corp shareholder income.
Is an S Corp election worth it in Colorado?
Colorado's $10/year annual report fee is negligible, making the S-Corp election very cost-effective. At $100K net profit, the federal savings of $5,500–$6,000 minus just $10/year leaves a strong net benefit. The election typically becomes worthwhile once net profit exceeds $50K–$60K.
What is Colorado's periodic report fee?
Colorado charges $10/year for LLCs and corporations to file a periodic report with the Secretary of State. This is one of the lowest annual fees in the country.
Do I need a registered agent in Colorado?
Yes. Colorado requires every LLC to have a registered agent with a physical address in the state. You can designate yourself if you're a Colorado resident, or hire a commercial registered agent service.
04 · Compare against
Run the model against another state.
05 · Methodology