An LLC is a legal entity formed under state law. An S corporation is a tax election. A single LLC can be taxed as a sole proprietorship (default), a partnership, an S corporation, or a C corporation; the question is about tax treatment, not which entity to form.
LLC: legal structure, liability protection, default pass-through taxation with self-employment tax on all profit. S corp: tax election available to an LLC or corporation, reasonable salary plus distributions, no self-employment tax on distributions, more compliance.
Most owners asking this question already have an LLC and are really asking whether to file Form 2553. The election trades self-employment tax savings for payroll, a separate return, and a salary requirement; it pays above a profit level that depends on state and salary.
Yes. An LLC elects S corporation taxation on Form 2553 without changing its legal form. That is the most common way businesses become S corporations.
Source: IRC 1361; IRS Form 2553 instructions
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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