Washington resident working as an Independent Contractor for a California company

I'll page Champ @Rick19744, but there are only a few considerations if the corporation owns no assets.

Honestly, you should probably sit down and have a one on one with a tax professional to understand the business and goals.  Having said that, a few comments:

• Not sure what cost you believe you will be saving based on the limited facts?
• If you are a single member LLC (disregarded entity)(SMLLC), all income will be taxed and subject to SE Tax.
• A SMLLC is essentially the same as a sole proprietor with some legal protection; each state has their own set of rules here and not going to provide any legal advice.
• With the current structure, as long as you pay yourself a reasonable salary, you potentially save some $$ on not paying SE Tax on distributions.  This can be tricky, and that is why it is best to discuss with a tax professional.  Not sure what you have been doing up to this point.
• Make sure the tax professional understands the impact on remote workers.
• Make sure you understand any filings with the California Secretary of State should you decide to make a change

I am thinking of saving the tax filing costs, like annual fees to the state and the cost to file my 1120S with my accountant. I guess the question is the costs for keeping the S Corp elect vs sole prop and pay the SE tax?

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@deeeee wrote:

.....I guess the question is the costs for keeping the S Corp elect vs sole prop and pay the SE tax?

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You should be paying yourself a salary for the services you perform for your S corporation, anyway (which would entail paying social security/medicare tax (FICA)), so that probably shouldn't enter the equation to a great extent.

You would, of course, save on annual fees and the cost of preparing the 1120-S.

Right, thanks! It's just that business has been pretty bad in the past year, revenue dropped from mid-6 digits to low 5 digits. There's not much salary I can use to pay myself after all the fixed costs. 

Yes, well, the annual fee then and also the accountant's fee, both of which are probably not insubstantial given the drop in revenue.