Self-employed taxes and LLC costs in Illinois, 2026
Illinois adds an entity-level replacement tax on S corporations and partnerships, on top of a flat personal income tax.
Total tax on this income in 2026
$21,565
Put aside 25% of each payment · $5,391 per quarter
| Self-employment tax (15.3%) | $12,010 |
| Federal income tax | $5,790 |
| Illinois income tax | $3,765 |
| QBI deduction used | $12,579 |
| Effective rate on all income | 25.4% |
With an S corp election and a $34,000 salary, about $2,777 less tax (check it).
Computed by Radif Partners from IRS and Illinois agency documents read on October 15, 2026 · How we calculate
A sole proprietor or single-member LLC in Illinois pays one flat state rate, 4.95 %, on federal AGI after a personal exemption of $2,925 ($5,850 on a joint return). On $75,000 of net profit, a single filer owes $3,305 to Illinois and $18,800 in all once federal income tax and self-employment tax are added. The twist arrives with the S election: the corporation then pays the personal property replacement income tax of 1.5 % on its Illinois net income, a charge a Schedule C filer never sees. In our model of $120,000 of profit with a $50,000 salary, that entity tax comes to $955, and the election still saves $4,074 after $2,000 of payroll and filing costs. The Secretary of State's LLC fees could not be read on its site when this page was checked, so they are left out of the totals here.
Illinois at a glance, 2026
| LLC filing fee | not verified |
| Annual Report (Form LLC-50.1) | not verified |
| Income tax | flat 4.95 % |
| S corporation election | followed by the state |
| Tax on $75,000 of profit (single) | $18,800 in all, $3,305 to Illinois |
Illinois is one of the few states that taxes a pass-through business twice over at the state level. The owner pays the individual income tax at 4.95 %, and the business, if it is an S corporation or an LLC taxed as a partnership, pays the personal property replacement income tax of 1.5 % on its Illinois net income (Illinois Department of Revenue, income tax rates). An S corporation files it on Form IL-1120-ST. A single-member LLC that keeps its default status is disregarded and owes only the personal tax.
S corp or LLC in this state
S corp saves
$4,007
| Salary used (42%) | $50,400 |
| Illinois entity tax | $948 |
What the replacement tax takes from the S corp saving
Run a one-owner business with $120,000 of profit through both structures. Taxed by default, the owner pays self-employment tax on the whole profit and $5,376 of Illinois income tax. As an S corporation paying a $50,000 salary, the payroll tax bill drops, but the company now owes $955 of replacement tax on its K-1 profit plus $477 of Illinois unemployment insurance, computed at the new employer rate of 3.35 % on the first $14,250 of salary. Net of $2,000 in payroll and filing costs, the election keeps an edge of $4,074. At lower profits the fixed costs and the entity tax eat that edge quickly; the LLC vs S corp calculator shows where it turns.
No standard deduction, one exemption
Illinois skips the standard deduction entirely. Taxable income starts from federal adjusted gross income, and the only allowance for a self-employed filer without dependents is the exemption, which is withdrawn above $250,000 of AGI for a single filer and $500,000 for a joint return (IDOR bulletin FY 2026-15). Because the rate never steps up, $120,000 of profit costs $5,376 in Illinois tax, and each extra dollar of profit adds the same 4.95 % at any income level. The half of self-employment tax you deduct federally lowers AGI, so it lowers the Illinois bill too.
The PTE election no longer has an end date
Partnerships and S corporations may choose to pay Illinois income tax at the entity level, at 4.95 % of net income, so that owners above the federal SALT cap turn a personal state tax into a business deduction. Public Act 104-0453 removed the expiration date of that election, per the same bulletin. Owners then claim a credit on their own return for the tax the entity paid.
Fees and quarterly payments
The Secretary of State charges a filing fee for the Articles of Organization and a fee for each annual report, due before the first day of the LLC's anniversary month. Its pages could not be read on October 15, 2026, so the calculator leaves those fees at zero; the current amounts are on the Illinois Secretary of State LLC page. Estimated payments are owed when you expect more than $1,000 of Illinois tax after withholding and credits, on Form IL-1040-ES (Form IL-1040-ES 2026), on the same four dates as the federal quarterly payments.