Self-employed taxes and LLC costs in Mississippi, 2026
Mississippi exempts the first slice of taxable income and keeps lowering the rate on the rest, with another cut scheduled for 2027.
Total tax on this income in 2026
$20,628
Put aside 24% of each payment · $5,157 per quarter
| Self-employment tax (15.3%) | $12,010 |
| Federal income tax | $5,790 |
| Mississippi income tax | $2,828 |
| QBI deduction used | $12,579 |
| Effective rate on all income | 24.3% |
With an S corp election and a $34,000 salary, about $3,673 less tax (check it).
Computed by Radif Partners from IRS and Mississippi agency documents read on October 15, 2026 · How we calculate
Mississippi taxes 2026 income at 4 %, but only above the first $10,000 of taxable income, which is taxed at zero, and only after a $2,300 standard deduction and a $6,000 personal exemption for a single filer. On $75,000 of self-employment profit, the state tax is $2,456 and the total with federal income tax and self-employment tax $17,951. The rate is scheduled to fall again, to 3.75%, in 2027. An LLC is about as cheap as it gets: $50 to form and a free annual report filed online by April 15. Electing S corporation status adds one cost the LLC does not have, the corporate franchise tax, with a $25 minimum. In our model at $120,000 of profit with a $50,000 salary, the election still saves $5,188 after that tax and $2,000 of payroll costs.
Mississippi at a glance, 2026
| LLC filing fee | $50 |
| Annual Report (Form F0108) | $0 a year |
| Income tax | flat 4 % |
| S corporation election | followed by the state |
| Tax on $75,000 of profit (single) | $17,951 in all, $2,456 to Mississippi |
Mississippi is in the middle of a multi-year phase-down. For tax year 2026 the rate on taxable income above $10,000 is 4 %, and the Department of Revenue lists 3.75% for 2027 (Mississippi DOR, tax rates). The rate quoted for returns filed during 2026 is the one for tax year 2025, so check which year a figure refers to. The untaxed first band, the deduction and the exemption together mean a freelancer earning a moderate profit pays a smaller share than the headline rate suggests.
Your set-aside rate by state
Set aside in Mississippi
23%
| Per quarter | $3,819 |
| Mississippi income tax | $2,084 |
What the 2026 rate means at three profit levels
A single filer with $50,000 of profit owes $1,527 to Mississippi; at $75,000 the amount is $2,456; at $120,000 it is $4,129. The base is federal AGI, so the deduction for half of self-employment tax flows through. Federal taxes are the larger share by far, which is why the set-aside rate above barely moves between Mississippi and a state with no income tax. Estimated payments are required when your annual liability exceeds $200 and less than 80% of it is covered by withholding, and the payments must total at least 80% of the year's tax (Mississippi DOR, individual FAQ). The set-aside guide has the federal method.
The LLC and the S corp franchise tax
A Certificate of Formation costs $50, and the annual report, filed online between January 1 and April 15, costs nothing (Mississippi SOS fee schedule). The picture changes when the LLC elects S status. Mississippi charges its franchise tax to all S corporations, LLCs taxed as S corps included: for tax years beginning in 2026, $0.50 per $1,000 of capital employed above $100,000, with a $25 minimum, falling to $0.25 in 2027 (Mississippi DOR, business FAQ). A service business with little capital pays the minimum. The LLC vs S corp calculator includes it when you pick Mississippi.
Entity-level election
Since 2022, partnerships and S corporations may elect on Form 84-381 to pay Mississippi income tax at the entity level (Mississippi DOR, elective PTE FAQ). The FAQ does not state the rate, so we leave it out. Mississippi has no city or county income taxes. For the owner of a one-person LLC, the practical choice therefore comes down to federal payroll savings against two state items: the franchise tax minimum and the cost of running a payroll. At $120,000 of profit, the S corp model in our calculator puts $25 of franchise tax on the corporation, a small amount next to the federal difference. The reasonable salary calculator tests the salary side.