Nurse Practitioner New Grad: LLC, S-Corp, or C-Corp?

Someone on Reddit is a Nurse Practitioner new grad and 2026 will be their first year; they estimate about $60,000 gross profit. They asked which entity to choose: LLC, S-Corp, C-Corp, or something else, for the right tax and liability choice. For a Nurse Practitioner with an estimated $60,000 gross profit in 2026, an LLC (Limited Liability Company) is often the best starting point. It gives liability protection similar to a corporation with pass-through taxation (income reported on your personal return, taxed once). You can elect S-Corp later when profit is high enough to justify the extra admin and payroll; C-Corp is usually not ideal for a small practice at that level.

Bottom line: For a Nurse Practitioner with an estimated $60,000 gross profit in 2026, an LLC is often the best starting point: liability protection, pass-through taxation (income on your personal return, taxed once), and simpler formation and maintenance than a corporation. You can elect S-Corp (Form 2553) later when profit justifies it; at $60k gross, S-Corp savings may be modest and S-Corps have stricter rules (payroll, reasonable compensation, eligibility). Many practitioners start as LLC and consider S-Corp once profits are consistently higher (e.g., roughly $80k to $100k+ net). C-Corp means double taxation and is usually not recommended for a new grad with $60k gross unless you have specific growth or investor plans. For entity choice and formation tailored to your situation, consult a tax advisor or business attorney. Margen can help you model LLC vs. S-Corp at different profit levels.

Question from Reddit

Which entity to choose?

Please help me make the right tax/liability choice. 2026 will be my first year as a Nurse Practitioner new grad, I am estimating about 60k on gross profit. Should I go LLC, S-Corp, C-Corp, or other?

Source: Reddit

Analysis

The user is asking for entity-selection guidance for their practice as a Nurse Practitioner, with LLC, S-Corp, and C-Corp in mind and an estimated $60,000 gross profit in 2026. Each entity type has different tax treatment, liability protection, and administrative requirements, which affect both taxes and how the practice is run.

Answer

For a Nurse Practitioner with an estimated $60,000 gross profit in 2026, an LLC (Limited Liability Company) is often the best starting point. It gives liability protection similar to a corporation with pass-through taxation: income is reported on your personal return and taxed once, not at both entity and owner level.

LLC

Liability: Helps shield personal assets from business debts and claims (subject to piercing the veil and state law).
Tax: By default, a single-member LLC is a disregarded entity; profit is reported on your Schedule C (or similar) and taxed as ordinary income with self-employment tax on net profit. Multi-member LLCs can be partnerships. You can elect to be taxed as an S-Corp (see below) if it's beneficial.
Admin: Generally simpler to form and maintain than a corporation; no requirement for a board, formal meetings, or stock.

S-Corp

Tax: If you elect S-Corp treatment (for an LLC or a corporation), you take a reasonable salary (subject to income and payroll taxes) and can distribute remaining profit as distributions, which are not subject to self-employment tax. That can reduce overall tax at certain profit levels.
Catch: At $60k gross, after salary and expenses, the savings from S-Corp may be modest. S-Corps have stricter rules: payroll, reasonable compensation, eligibility (e.g., shareholder limits, one class of stock), and more paperwork. Many practitioners start as LLC and consider S-Corp once profits are higher (e.g., consistently above roughly $80k to $100k+ net).
Liability: Similar to a corporation if you form a corporate entity and elect S; an LLC electing S-Corp tax still has LLC liability protection.

C-Corp

Tax: Double taxation: the corporation pays entity-level tax on profits, and you pay personal tax on dividends (and salary). For a small practice with no plans to retain earnings in the corp or raise outside investment, this is usually not ideal.
When it fits: C-Corps are more relevant for larger or growth-oriented practices, outside investors, or specific benefit/retention strategies. Not typically recommended for a new grad with $60k gross.

Summary

Start with an LLC for liability protection and simplicity; you can always elect S-Corp later when profit justifies the extra admin and payroll.
Margen can help you model LLC vs. S-Corp at different profit levels so you can see when an S-Corp election might be worth it.

Applicable Sections

Federal / IRS

Pass-through taxation: LLCs (disregarded or partnership) and S-Corps generally do not pay entity-level federal income tax; income is reported on the owner's return. (IRS Publication 3402; see Tax Issues for Limited Liability Companies.)
S-Corp election: File Form 2553 to be taxed as an S-Corp; must meet eligibility (e.g., number and type of shareholders, one class of stock).
Reasonable compensation: S-Corp shareholders who perform services must receive reasonable salary (subject to employment taxes); the IRS scrutinizes low salary plus high distributions.

State / Local

State and local rules vary for formation, annual filings, and tax (e.g., NYC and NY state have their own entity and tax rules). Consult a local professional for your jurisdiction.

Practical Notes

LLC: Easiest to set up and run; gives liability protection and flexible tax treatment. A solid default for a new NP with $60k gross.
S-Corp: Can lower self-employment tax once profit is high enough to justify salary plus distributions; requires payroll, reasonable comp, and ongoing compliance. Revisit when profits grow.
C-Corp: Usually not the right fit for a small practice with $60k gross; consider only if you have specific growth or investor plans.
Margen can help you compare LLC vs. S-Corp at different income levels so you can plan when (or whether) to elect S-Corp.
Consult a tax pro or attorney who works with healthcare practices and your state to finalize entity choice and formation.

Limitations

This answer does not cover state-specific formation, licensing, or tax (e.g., NY/NYC), malpractice or insurance requirements, or personal circumstances (other income, spouse, retirement plans). For entity choice and formation tailored to your situation, consult a tax advisor or business attorney. Margen can help you model tax outcomes for different entity choices before you decide.

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Nurse Practitioner New Grad: LLC, S-Corp, or C-Corp? (Reddit Q&A)