MD · Tax year 2026 · Last reviewed 2026-08-24

LLC vs S Corp in Maryland: Tax Savings Calculator.

Compare federal payroll taxes, self-employment taxes, Maryland ’s $300 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 Maryland's recurring cost, the estimated net modeled benefit (yr 1) is$8,805.

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LLC Filing Fee

$100

one-time, Maryland Secretary of State

Annual Franchise / Report (LLC)

$300

recurring, every year

S-Corp Recurring Cost

$300

same as the LLC rate

Estimated Net Modeled Benefit (yr 1)

$8,805

federal delta minus the annual fee

01 · Maryland model

Tune the inputs. Numbers update live.

Annual Business Net Profit$100,000

$20,000$1,000,000

What does this mean? Your expected business profit for the year after business expenses but before the owner's salary.

Proposed Owner Salary$50,000

$10,000$100,000

The IRS requires "reasonable compensation" for S-Corp shareholder-employees. The salary is capped at your current net profit.

Est. S-Corp admin overhead (bookkeeping + payroll + extra tax prep)$1,200

$0$6,000

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.

Other W-2 Wages (optional)$0

$0$400,000

Per IRS Form 8959, these are added to your business income to determine whether the 0.9% Additional Medicare Tax applies.

Filing Status

Sets the Form 8959 threshold: $200K (single / HOH), $250K (MFJ), $125K (MFS).

Subtract §199A QBI drag from savingsThe S-Corp election moves owner salary out of the §199A qualified business income base. Off by default — QBI is fact-specific.

Marginal federal rate

Maryland LLC recurring fee (deducted from savings)

$300

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)

$8,805

Federal payroll-tax delta: $10,305
− Maryland annual fee: $10,005
− Modeled S-Corp admin overhead: $1,200
= Estimated net modeled benefit: $8,805

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 $100 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 Maryland's $300 LLC annual franchise / report fee and the $300 modeled S-Corp recurring cost and the one-time $100 Maryland LLC filing fee (setup cost, not deducted from the year-1 net benefit). They do not include federal or Maryland 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 Maryland 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. Marylandcharges $300per 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 Maryland annual fee, the estimated net modeled benefit is$8,805.

State-specific note: Maryland's $300 Personal Property Return filing fee applies to LLCs that own/titlereal or personal property used in business in Maryland (furniture, equipment, inventory, vehicles titled in MD, leasehold improvements). LLCs with no MD-situs property file a $0 exemption return but must still file annually.

Localized formula — how this number was calculated

// Maryland — 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 − 300)
savings      = max(0, netOfFee − 1200)        // $1,200 admin overhead

LLC filing: one-time $100 to form the entity in Maryland.
Annual franchise / report: $300/yr to maintain good standing.
State income tax: applies on top of federal ordinary rates; not modeled.

03 · FAQ

LLC vs S Corp in Maryland — frequently asked questions

Common questions about choosing between an LLC and S Corp in Maryland, 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 Maryland?

Maryland charges a $100 filing fee to form an LLC. The annual Personal Property Return filing fee is $300 for LLCs that own business property in Maryland.

Does Maryland have a state income tax?

Yes. Maryland imposes a state individual income tax with rates ranging from 2% to 5.75%. This applies to both LLC and S-Corp pass-through income. Maryland also has a separate corporate income tax of 8.25%.

Is an S Corp election worth it in Maryland?

At $100K net profit, the federal savings of $5,500–$6,000 minus the $300 annual property return fee still leaves a net benefit. The S-Corp election typically becomes worthwhile once net profit exceeds $70K–$90K in Maryland.

What is Maryland's Personal Property Return?

Maryland requires LLCs and corporations that own or title real or personal property used in business in Maryland to file an annual Personal Property Return with a $300 fee. LLCs with no MD-situs property file a $0 exemption return but must still file annually.

Do I need a registered agent in Maryland?

Yes. Maryland requires every LLC to have a registered agent with a physical Maryland address. You can designate yourself or hire a commercial agent.

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