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S corp vs LLC (sole proprietor) tax calculator
Should you elect S corp status? Enter your profit and a reasonable salary and compare total federal tax and costs under both structures.
Federal figures for tax year 2026: self-employment tax of 15.3% on 92.35% of net profit (12.4% Social Security up to the $184,500 wage base, 2.9% Medicare), half of self-employment tax deducted from income, standard deduction of $16,100 single, $32,200 married filing jointly, $24,150 head of household, the 20% qualified business income deduction, and 2026 federal brackets. State income tax is not included. Estimates only; confirm with a tax professional. Figures should be verified against the final IRS inflation adjustments before relying on them.
Simplification: the S corp scenario treats profit above salary, payroll tax and costs as distributions taxed as ordinary income with the QBI deduction, and ignores the employer payroll tax deduction timing, state differences and retirement plan interactions.
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FAQ
Questions, answered
What is a reasonable salary?
What you would pay someone else to do your job. The IRS looks at comparable wages, your hours and your role. Setting it too low is the most audited S corp mistake. Many CPAs use 40% to 60% of profit as a starting point for service businesses.
At what profit does an S corp make sense?
Usually when profit is comfortably above $60,000 to $80,000 and expected to stay there. Below that the payroll and filing costs eat the savings.
Does ProfitBooks work for S corps?
Yes. Upload the business bank statement and payroll reports; officer salary, payroll taxes and distributions are categorized separately. See bookkeeping for S corporations.
Stop estimating. Know your real numbers.
Upload your bank statements and ProfitBooks builds the profit and loss these calculators are guessing at. 100 free credits to start, $20 a month, billed annually, after that.