Is an S-Corp Right for You?
Being taxed as an S-Corp can significantly reduce your self-employment taxes. Use our S-Corp Tax Calculator to discover how much you can save by electing S-Corp status for your business.
Calculate now and see immediate benefits.
What’s your estimated yearly net income for the business and how much of that would you pay yourself as an S Corporation?
Estimated yearly income
$
Input a maximum of $1,000,000.
The salary you would pay yourself
$
Salary can't be higher than income
This amount can’t exceed the estimated yearly income.
Taxes paid as a Sole Proprietor:
Self Employment Taxes paid
as a Sole Proprietor
Taxes paid as a Corporation:
With a salary of
and a dividend of
Total Savings:
If you take $70,000 out of your business:
LLC Taxes
An LLC is a smart choice for many businesses because of the flexibility in how you're taxed.
$10,710
$0
S-Corp Taxes
With an S-Corp you'll only pay payroll taxes on your salary, not the entire business profit.
$6,885
$3,825
Breaking Down the S-Corp
An S-Corporation (S-Corp) offers key benefits like avoiding double taxation, potential savings on self-employment taxes, protecting personal assets, deducting business expenses, adding credibility, and simplifying ownership transfers — making it a smart choice for many business owners.
Why Choose an S-Corp?
Allows potential savings on self-employment taxes through distributions
Allows for pass-through taxation
Protects personal assets
Enables deductions for business expenses
Important Considerations
Pay a reasonable salary to avoid IRS audits
File the IRS Form 2553 within 75 days of LLC formation
There are IRS and corporate guidelines that need to be upheld
S-Corp Tax Savings Example
As a Sole Proprietor
Pay self-employment taxes on your entire income.
As an S-Corp
Split your income between salary and distributions to reduce your tax burden.