Should I choose an S-corp for my business in 2026 or 2027 planning?
Use this S-corp tax savings calculator to compare sole proprietor and S-corp tax outcomes. It estimates how reasonable salary, distributions, payroll taxes, self-employment tax, and administrative costs may affect the break-even point.
S-corp tax savings calculator
Quick answer
An S-corp can reduce self-employment tax when business profit is high enough and reasonable salary, payroll taxes, and admin costs still leave net savings. This simulator estimates that tradeoff.
Also answers
- sole proprietor vs S-corp calculator
- LLC vs S-corp tax calculator
- reasonable salary calculator
- self-employment tax savings calculator
Good fit when
- Comparing entity tax outcomes
- Estimating S-corp break-even profit
- Planning reasonable salary assumptions
Have ready
- Business net profit
- Reasonable salary and payroll assumptions
- S-corp administrative costs
Result you get
Estimated sole prop tax, S-corp tax, net savings, and break-even notes.
How this calculation works
- Estimates SE tax for a sole proprietor using net profit.
- Models an S-corp salary and distribution split with payroll taxes.
- Compares total federal tax and potential savings.
Common mistakes and caveats
- Reasonable salary rules are complex and fact-specific.
- Entity setup and payroll costs are not included.
- State taxes can change the comparison.
FAQ
Does this account for payroll and setup costs?
No. It focuses on tax impact; setup and ongoing costs should be considered separately.
TaxGuide Pro provides free state and federal tax calculators for individuals, freelancers, and small businesses.