S-Corp vs LLC Tax Calculator
S-Corp vs LLC Tax Calculator
Crossover chart — the exact profit threshold where S-Corp saves more than it costs.
Crossover chart — the exact profit threshold where S-Corp saves more than it costs.
Generated from the inputs below — a record you can revisit, or share with anyone helping you plan.
IRS requires a "reasonable" salary. Most advisors suggest 40–60% of net profit. Higher % = less FICA savings but lower audit risk.
Payroll service + extra accounting + state fees.
Above ~$42,000 annual net profit, S-Corp saves more than its admin cost of $2,500/yr.
Used as a simple proxy for reasonable compensation across all income levels. Adjust to match your actual situation.
Sole prop: $7,933 | S-Corp: $7,996
Sole prop: $12,989 | S-Corp: $11,835
Sole prop: $18,830 | S-Corp: $16,717
Sole prop: $25,745 | S-Corp: $22,479
Sole prop: $43,385 | S-Corp: $37,332
Sole prop: $61,580 | S-Corp: $52,698
Sole prop: $93,637 | S-Corp: $89,568
Free financial calculators, verified against primary sources like the IRS, CFPB and Federal Reserve. No sign-up, and every calculation runs entirely in your browser — nothing you type is ever sent to us.
Picked based on what this calculator does
Compare SE tax vs S-Corp salary + distribution split — see your annual FICA savings.
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Open calculatorSee your 2026 marginal and effective tax rates with bracket breakdown.
Open calculatorEstimate your annual federal income tax liability.
Open calculatorEstimate your 2026 Child Tax Credit, including phase-out and refundable ACTC.
Open calculatorThe question is not whether an S-Corp saves taxes — it generally does, at sufficient income. The question is at what income do the tax savings exceed the S-Corp's overhead? That is the number most calculators skip. This S-Corp vs LLC tax calculator answers it directly with a side-by-side comparison across seven income levels and a plain-English breakeven point.
A single-member LLC taxed as a sole proprietor is simple: all net profit is self-employment income, you file Schedule C, done. An S-Corp requires payroll, a separate tax return (Form 1120-S), and more accounting work. The S-Corp makes financial sense only when FICA savings exceed those admin costs. The crossover depends on your salary percentage and what you pay for payroll and accounting.
Adjust the salary percentage and admin cost below to see the crossover for your specific situation.
The table below shows total federal tax burden (SE/FICA + income tax + admin costs where applicable) at each income level, verified against this calculator's formulas using 2026 IRS brackets and the $184,500 SS wage base:
| Net Profit | Sole Prop / LLC | S-Corp | S-Corp Saves |
|---|---|---|---|
| $40,000 | $7,933 | $7,996 | −$64 |
| $60,000 | $12,989 | $11,835 | +$1,154 |
| $80,000 | $18,830 | $16,717 | +$2,113 |
| $100,000 | $25,745 | $22,478 | +$3,267 |
| $150,000 | $43,385 | $37,332 | +$6,053 |
| $200,000 | $61,580 | $52,698 | +$8,882 |
| $300,000 | $93,637 | $89,568 | +$4,069 |
Single filer, 50% salary, $2,500 S-Corp admin. Federal tax only — excludes QBI, state taxes, Additional Medicare (0.9%), and self-employed health insurance deduction.
Note that savings peak around $200,000 then begin to taper. This is because at very high incomes, the sole prop's SE tax also hits the SS wage base cap ($184,500), reducing the marginal benefit of routing income through an S-Corp. The Medicare portion (2.9%) still benefits from S-Corp treatment, but the gain per additional dollar narrows.
Two inputs move your crossover number most:
1. The salary percentage. A higher percentage means more income subject to FICA and less flowing as a tax-free distribution. At 70% salary (more defensible for high-service businesses), FICA savings shrink and breakeven rises. At 40% (aggressive but potentially defensible), savings are larger but audit risk increases.
2. Admin costs. A $4,500/year quote versus $2,500 raises your breakeven by roughly $15,000–$20,000 in net profit. Get quotes from at least two payroll services and ask your CPA exactly what they charge for Form 1120-S and the associated state return before deciding.
Your state matters. California adds an $800/year S-Corp minimum tax plus 1.5% of S-Corp net income. That alone can push breakeven above $80,000 in profit for California businesses. New York, Illinois, and Massachusetts also have state-level variations. This calculator models federal tax only.
A single-member LLC and an S-Corp are both pass-through entities — profit flows to your personal return either way. The difference is how that income is characterized for FICA/SE tax.
For most solo service providers, the real choice is whether to keep the LLC as-is (Schedule C simplicity) or file Form 2553 to add S-Corp tax treatment. The underlying legal entity can stay the same LLC — only the tax classification changes.
If you mean the tax election: an LLC doesn't need to change its legal structure to be taxed as an S-Corp. You file Form 2553 and the IRS taxes the existing LLC as an S-Corp from that date forward. If you mean whether S-Corp tax treatment makes sense for your LLC, the answer depends on your net profit (generally $60,000+ before it pencils out), your admin cost tolerance, and your state tax rules.
Because the Social Security wage base cap ($184,500 in 2026) limits SS tax for both sole props and S-Corp owners. Above that threshold, the sole prop only pays Medicare (2.9%) on excess SE income — and the S-Corp saves only Medicare on the distribution amount, not the full 15.3%. The FICA benefit narrows, though Medicare savings continue indefinitely.
Yes, but with restrictions. Revoking an S-Corp election generally requires consent of more than 50% of shares and takes effect the following tax year (or the current year if revoked before the 16th day of the third month). Once revoked, the entity typically cannot re-elect S-Corp status for five years without IRS consent (IRC §1362(g)). Don't elect S-Corp status lightly — it's easier to start than to reverse.
Yes, significantly. As a sole prop, your Solo 401(k) contribution limit is based on net self-employment income. As an S-Corp owner, it's based on your W-2 salary — which is typically lower. This can reduce your maximum retirement contribution. A SEP-IRA as a sole prop can also allow contributions of up to 25% of net SE income, which may exceed what's possible through an S-Corp at moderate income levels. Model both before deciding.
The S-Corp vs LLC tax question comes down to a simple crossover: at what income does the FICA savings from an S-Corp election exceed the admin costs of running one? For most single-filer service businesses at a 50% salary split and $2,500 in admin costs, the answer is approximately $55,000–$60,000 in annual net profit. Below that, the LLC wins on simplicity and total cost. Above it, the S-Corp typically saves more each year.
This S-Corp vs LLC calculator shows you both sides of the comparison at seven income levels — $40k through $300k — using 2026 federal tax rates and the current $184,500 Social Security wage base. You can adjust the salary percentage (what portion of profit becomes W-2 wages) and admin cost estimate to match your actual situation. The chart shows where the lines cross and how much the S-Corp saves at each income point.
One nuance the chart reveals: S-Corp savings don't grow linearly with income. They tend to peak around $150,000–$200,000 for a 50% salary split, then plateau as the SS wage base cap also limits the sole prop's SE tax on the excess. The Medicare savings (2.9%) continue on the FICA-free distribution regardless of income, but the SS savings (12.4%, capped) diminish above the wage base.
Go deeper than the calculator — the full playbook, explained.
