S Corp Tax Calculator 2026: S Corp vs LLC Savings

Compare the 2026 federal tax of an S corp with a sole proprietorship or LLC: reasonable salary, payroll taxes, K-1 profit, QBI and the yearly saving.

Tax saved with an S corp per year

β€”Sole proprietor or LLC: total tax
β€”S corp: total tax and costs
β€”Self-employment tax (sole proprietor)
β€”Payroll taxes on the salary (both halves)
β€”Distribution (K-1 profit)
β€”Income tax (S corp)
ProfitSalarySole proprietorS corpSaving

Federal taxes for 2026, with the 20% QBI deduction on the K-1 profit treated like a service business above the income threshold. The IRS requires a reasonable salary for the work you do. State taxes, state S corp fees and unemployment tax on your own salary are not included.

What it does

A sole proprietor or single-member LLC pays 15.3% self-employment tax on almost all the profit. An S corp pays you a salary, which pays payroll taxes, and the rest of the profit comes as a distribution without Social Security or Medicare. The calculator compares the federal tax of both, with the extra costs of running an S corp.

How to use it

  1. Choose your filing status and type the business profit for the year before paying yourself.
  2. Type the reasonable salary for your work and the extra costs of the S corp.
  3. See the saving per year and the table for other profit levels with the same salary share.

The arithmetic runs in your browser. Nothing you type is sent anywhere and nothing is stored, so you can use these with real numbers.

Frequently asked questions

How much can an S corp save in taxes?
With 100,000 of profit and a 50,000 salary, a single owner pays 22,365 as a sole proprietor and 19,629 as an S corp, counting 2,000 of extra costs: a saving of 2,735 a year.

At what income does an S corp make sense?
It depends on the salary and the extra costs. With the salary at half the profit and 2,000 of costs, 50,000 of profit saves only 1,025 a year, while 150,000 saves 4,450.

Why does an S corp save tax?
Only the salary pays Social Security and Medicare; the distribution pays income tax but no payroll tax. The saving shrinks as the salary rises and above the Social Security wage limit of 184,500.

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