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S Corp Tax Calculator

Should your LLC elect S corporation status? Enter your profit and the salary you'd pay yourself. We'll compare the federal tax both ways, side by side.

Written byRegistryWise Editorial TeamFact-checked against IRS and SSA figures for 2026 · How we research
On this page
  1. Calculator
  2. How it works
  3. When it makes sense
  4. How to elect
  5. Questions
  6. Sources

Electing S corp status would save you

$0

As an LLC (the default)

$0

    As an S corp

    $0

      Federal tax only, for one owner who works in the business. It leaves out state taxes (some states tax S corporations on their own terms), state unemployment tax on payroll, and other deductions and credits.

      How the calculator works

      As an LLC, a one-owner LLC is taxed like a sole proprietor. All of the profit carries self-employment tax: 15.3% on 92.35% of it, with the 12.4% Social Security part stopping at $184,500 in 2026. Half of that tax is deductible, and the profit is taxed again as income.

      As an S corp, the business runs payroll for you. Your salary carries 7.65% in Social Security and Medicare from you and 7.65% from the company. The company deducts its half, your salary, and the extra running costs. Whatever profit is left passes to you as a distribution with no payroll tax, and both the salary and the distribution are taxed as income on your personal return.

      We figure the federal income tax both ways with the 2026 brackets and standard deduction, so the comparison counts the deduction for half the self-employment tax and the change to your qualified business income deduction, not just the payroll tax.

      When an S corp makes sense

      The saving grows with the gap between your profit and a reasonable salary. If your profit is modest, a reasonable salary takes up most of it, and the extra cost of payroll and a separate tax return can wipe out the saving. Try your own numbers above, and set the salary at what you'd pay someone else to do your job, not the lowest figure that shows a saving.

      Above the Social Security wage base of $184,500, the saving shrinks, because self-employment tax on earnings past that point is only the 2.9% Medicare part.

      How an LLC elects S corp status

      1. Get an EIN for the LLC if it doesn't have one. It's free from the IRS. See our EIN guide.
      2. File Form 2553 with the IRS no more than 2 months and 15 days after the start of the tax year the election should take effect. For a calendar-year business, that's March 15.
      3. Set up payroll and pay yourself a reasonable salary with withholding, before taking distributions.
      4. File Form 1120-S each year for the company, and give yourself a Schedule K-1 for your share of the profit.

      Your state may also ask for its own S corp filing or tax return. Check with the state's tax agency before you elect.

      Not set up yet? You need an LLC or corporation before you can elect. Our LLC cost calculator shows the state fees, and the self-employment tax calculator shows what you'd pay without the election.

      Frequently asked questions

      How does an S corp save on taxes?

      By default, all of an LLC owner's profit carries 15.3% self-employment tax. As an S corporation, you pay yourself a salary, which carries the same Social Security and Medicare taxes through payroll, and take the rest as distributions, which do not. The saving is the payroll tax on those distributions, minus what it costs to run payroll and file the extra tax return.

      What is a reasonable salary for an S corp owner?

      The IRS requires an S corporation to pay a shareholder who works in the business reasonable compensation before taking distributions. It looks at your training and experience, duties, time spent, what comparable businesses pay for similar work, and how the business earns its money. There is no fixed percentage. A salary set too low can be reclassified as wages, with back payroll taxes.

      When do I file Form 2553?

      No more than 2 months and 15 days after the start of the tax year you want the election to take effect. For a business on the calendar year, that means by March 15. The IRS instructions for Form 2553 explain late-election relief if you miss it.

      Can a single-member LLC be taxed as an S corp?

      Yes. The IRS says Form 2553 is used by qualifying small business corporations and limited liability companies to elect S corporation status. Your LLC stays an LLC under state law; only its federal tax treatment changes.

      Does an S corp avoid income tax?

      No. The profit still passes through to your personal return and is taxed at your income tax rates. What changes is how much of it carries Social Security and Medicare tax. Distributions can also change your qualified business income deduction, which the calculator includes.

      Sources

      We take every fee, deadline and rule on this page from these pages and nowhere else. Rules change, so open the source before you pay anything.

      1. 1.IRS: S corporation compensation and reasonable payChecked November 9, 2026
      2. 2.IRS Instructions for Form 2553Checked November 9, 2026
      3. 3.IRS: About Form 2553Checked November 9, 2026
      4. 4.IRS Topic 554: Self-employment taxChecked November 9, 2026
      5. 5.IRS Topic 751: Social Security and Medicare withholding ratesChecked November 9, 2026
      6. 6.SSA: Contribution and benefit baseChecked November 9, 2026
      7. 7.IRS: tax inflation adjustments for tax year 2026 (IR-2025-103)Checked November 9, 2026
      8. 8.IRS Rev. Proc. 2025-32 (2026 QBI thresholds)Checked November 9, 2026

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