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LLC vs Sole Prop Calculator for Delaware

What forming an LLC costs in Delaware (DE), and how the state fee changes the sole proprietor vs LLC + S-Corp comparison.

Delaware LLC costs

LLC filing fee (one-time)$90
Annual report / franchise fee$300
State fees in the first year$390
Top state income tax rate6.6%

What an LLC costs in Delaware

Forming an LLC in Delaware costs $90 in state filing fees, followed by about $300 a year in annual report or franchise fees — roughly $390 in state fees in the first year.

Delaware note: Popular for holding companies.

Fees change, and some states charge extra for expedited filing, publication or name reservation. Confirm the current amounts with Delaware's business filing office (usually the Secretary of State) before you file.

Sole prop vs LLC + S-Corp in Delaware: a worked example

Take the calculator's default numbers — $80,000 of revenue and $15,000 of expenses, so $65,000 of profit — and enter Delaware's $300 annual fee in the state fee field. The estimated tax is $23,484 as a sole proprietor versus $20,373 as an LLC taxed as an S-Corp: about $3,112 a year in favor of the LLC.

Where the difference comes from: as a sole proprietor, all of your profit is subject to self-employment tax (15.3% on 92.35% of profit). With an S-Corp election the calculator assumes half of the profit is paid to you as a salary that carries payroll tax and the rest is taken as a distribution that doesn't. It then adds Delaware's fee plus a flat $800 overhead allowance to the LLC side.

In the year you form the LLC, add the one-time $90 filing fee to the fee field too — the first-year saving shrinks by that amount.

These are simplified estimates: a flat 22% federal income tax rate, and a 50/50 salary split the IRS may not accept as a reasonable salary for your work. This is general education, not tax or legal advice — talk to a CPA before electing S-Corp status.

Delaware income tax and your business

Delaware's top income tax rate is 6.6%. Because LLC and S-Corp profits usually pass through to your personal return, state income tax generally applies to the profit under either structure — so the calculator leaves it out and the comparison comes down to self-employment tax versus fees.

Some states also charge entity-level taxes or minimum fees on LLCs or S-Corps, so check Delaware's rules for the structure you choose.

Open the LLC vs Sole Prop Calculator to run your own numbers.

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