Free business tools · Tax year 2026

Would an S-corp
save you money?

Compare federal taxes and added costs using your numbers. Start with profit and a proposed salary, then refine your estimate.

No signup. Your calculator entries stay in this page and are not submitted to us.

Your business

Example amounts are prefilled. Replace them with your estimates.

Annual business profit

After ordinary business expenses, before owner salary, owner payroll taxes and the additional S-corp costs below. Not revenue.Proposed annual owner salary

Example only. Use a reasonable salary for your actual work—not a percentage chosen just to reduce taxes.Filing status

Other income & annual costs

Open this if you have another job, household income, or different payroll and accounting costs.

Your annual wages from other jobs

Exclude the proposed S-corp salary. These wages affect your Social Security limit.Other ordinary taxable income

Exclude wages above, this business, capital gains and other self-employment income.Additional annual S-corp costs

Example: $2,500 for added payroll services and tax preparation. Replace with your incremental costs, not total bookkeeping costs.Annual owner unemployment taxes

Example placeholder: $300 for federal/state unemployment. Actual eligibility and rates vary; adjust to your payroll estimate.

QBI details for higher incomes

Needed when taxable income before QBI exceeds $201,750 (single/head of household), $201,775 (married separately), or $403,500 (joint).

Specified service business (SSTB)Examples include accounting, law, health and consulting. Classification depends on the work performed.Existing qualifying employee W-2 wages

Exclude owner salary. These wages are already expensed in starting profit; used here only for the QBI limit.Qualified property basis (UBIA)

Unadjusted basis of eligible depreciable property for QBI. Leave at zero if none.

Federal comparison only. State income/franchise taxes and entity fees are not calculated.

Estimated annual difference

$2,852

Potential S-corp savings

After modeled federal taxes and $2,800 in added annual costs. A starting point for a closer review.

Your side-by-side estimate

2026 · annual

Modeled business impact	Sole proprietoror default single-member LLC	S-corp
Federal income taxIncremental regular tax before credits / AMT	$11,506	$13,629
SE / owner payroll taxesIncludes both payroll shares and Additional Medicare, if applicable	$16,955	$9,180
Added payroll & professional costs	$0	$2,500
Owner unemployment taxes	$0	$300
Combined modeled cost	$28,462	$25,609

See deduction and payroll details

Basic standard deduction: $16,100
Sole proprietor QBI deduction: $19,084
S-corp QBI deduction: $10,522
Owner employee SS / Medicare*: $4,590
S-corp employer SS / Medicare: $4,590
S-corp pass-through profit: $52,610

*After any modeled employee Social Security excess-credit adjustment from other jobs; excludes Additional Medicare shown in the combined tax row. Pass-through profit is not the same as a distribution. QBI deductions are already reflected in income tax above.

Federal estimate, not total taxes owed or a recommended election. State taxes, credits, benefits and retirement planning can change the outcome.

What if profit changes?

Same salary, other income and annual costs. Each row recalculates federal taxes.

Business profitS-corp difference

$60,000Salary / costs exceed profit

$90,000$1,013more cost

$120,000Current scenario$2,852less cost

$150,000$6,633less cost

$180,000$10,323less cost

Salary may need to change as your work changes. These are scenarios, not salary recommendations.

Beyond the estimate

The right election starts with your actual business.

Salary, state rules, benefits and retirement contributions can change the answer. Matthew Folaron, Enrolled Agent, can help you review the full picture.

Discuss my S-corp options

Is an LLC different from an S-corp?

An LLC is a legal structure, while S-corp treatment is a tax election. This calculator compares one active owner’s sole proprietorship or default single-member LLC with an eligible business taxed as an S-corp. It does not compare liability protection or multiple-owner arrangements.

How should I choose an owner salary?

Use compensation appropriate for your duties, time, experience and market. The IRS requires reasonable compensation for services before nonwage distributions. The example salary is not a recommendation, and there is no universal salary percentage that makes an election safe.

What does this estimate include?

2026 regular federal income tax attributable to the modeled business, self-employment or owner payroll taxes, Additional Medicare Tax, a modeled qualified business income (QBI) deduction, and the additional costs you enter. Other household income is held constant. The income-tax row is the difference from the household’s modeled tax without this business; it is not your entire household tax bill.

We use the basic standard deduction and assume all entered income is ordinary income, wages are subject to Social Security and Medicare, and you materially participate in one eligible domestic business. Wages entered are assumed equal for income-tax, Social Security and Medicare purposes. Employee Social Security is adjusted for other jobs; the S-corp’s employer share remains due.

What needs a more detailed review?

State and local income/franchise taxes, entity fees, elective pass-through entity taxes, tax credits, AMT, capital gains, investment income taxes, itemized or age-related deductions, health insurance, retirement contributions, other businesses, QBI loss carryovers, special deductions and business losses are not modeled. S-corp unemployment tax is an editable estimate. This tool is not a tax return, payment voucher or election recommendation.

Added payroll and professional fees are treated as deductible annual business expenses. One-time setup costs are excluded. Salary and additional costs stay fixed in the profit comparison. Retirement contribution limits and future Social Security benefits may also change with salary.

How does the QBI estimate work?

The model applies the 20% calculation, taxable-income limitation, 2026 active-business minimum where eligible, and wage/property limitations and service-business phaseouts. For higher incomes, use the additional QBI fields. Owner salary is excluded from S-corp QBI. Existing employee wages must already be included in the expenses used to calculate your starting profit.

Sources and tax year

Tax year 2026. Rules checked September 28, 2026. Estimates are rounded for display; calculations use unrounded amounts.