S Corp Tax Calculator 2026: Would an S Corp Save You Money?
The honest version: what you save, what you give up, and what it costs to run. Estimate only, not tax advice.
Would an S corp save you money?
Your LLC does not change your taxes by itself. Electing S corporation status can, by splitting your profit into a salary and a distribution. Enter your numbers and see whether that is worth doing in your case.
How the math works
Start with the default. Your LLC's profit lands on your personal return and carries self-employment tax of 15.3%, made up of 12.4% for Social Security up to the 2026 wage base of $184,500 and 2.9% for Medicare with no ceiling. That tax applies to 92.35% of your profit, and it comes on top of ordinary income tax.
Now elect S corporation status. You become an employee of your own company. The salary you pay yourself carries the same 15.3%, half withheld from you and half paid by the company. Everything left over comes out as a distribution, and distributions carry no payroll tax at all. That gap is the saving, and on paper it looks large.
Two things eat into it. The first is the one most calculators skip. The qualified business income deduction is worth 20% of your business income, but a W-2 salary is not business income, so every dollar you shift into salary shrinks the deduction. The second is plain cost: payroll has to be run, and a second tax return has to be filed. The calculator prices both and shows you what survives.
Before you elect
Three things are worth saying plainly. An S corp is a commitment, not a switch. You are signing up to run payroll every month and file a second return every year, and revoking the election generally locks you out of re-electing for five years.
Reasonable compensation is not optional. The entire saving comes from paying yourself less salary, which is exactly the number the IRS looks at. Document how you picked it.
And this calculator covers federal tax only. Some states tax S corps directly, some charge franchise taxes or annual report fees regardless of profit, and a few treat the election very differently from the IRS. Check your state, and run the decision past a CPA before you file Form 2553.
Frequently asked questions
No, not by itself. A single-member LLC is taxed exactly like a sole proprietorship: the profit goes on Schedule C and carries self-employment tax. An LLC gives you liability protection and a business identity. The tax savings people talk about come from the S corporation election, which is a separate choice you make after forming.
Self-employment tax is 15.3% on essentially all of your profit. With an S corp election you split the profit into a reasonable salary, which carries the same 15.3% in payroll tax, and a distribution, which carries none. The saving is 15.3% of whatever you take as distribution instead of salary.
What you would have to pay someone else to do your job. The IRS does not publish a formula. Look at what your role pays in your area and your industry, write down how you arrived at the figure, and keep that documentation. Paying yourself an artificially low salary to dodge payroll tax is the fastest way to lose an audit.
Because the section 199A deduction is worth 20% of your qualified business income, and W-2 wages are not qualified business income. Every dollar you move from distribution into salary shrinks that deduction. Most S corp calculators ignore this and overstate the savings. Ours does not.
There is no universal number, which is why the calculator asks for yours. As a rough guide, below about $50,000 of profit the costs usually swallow the savings, and somewhere above $80,000 to $100,000 of steady profit the case gets strong. Change the profit figure above and watch the verdict flip.
Real payroll, meaning paychecks, withholding, and quarterly payroll filings. A separate business tax return, Form 1120-S, plus a K-1 to yourself. Most owners pay a payroll service and a CPA, which is why the calculator asks you to price both.
File Form 2553 with the IRS. To apply to the current tax year it is generally due within two months and 15 days of the start of that year, though the IRS grants late relief in many cases. You keep your LLC; you are only changing how it is taxed.
Yes, you can revoke it, but not casually. After revoking, the IRS generally will not let you re-elect for five years without permission. Treat the election as a decision you intend to keep for a while, which is another reason not to make it for a few hundred dollars.
No. Your liability protection comes from the LLC itself and from keeping business and personal finances properly separate. The S corp election is purely a tax classification and does not add or remove protection.