S-Corp Savings Calculator
Goal: Show you how much you can save in taxes by electing S-Corporation status instead of remaining an LLC or sole proprietorship
Step-by-Step Instructions:
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Enter Your Business Income: Input your annual net business profit (don't include income taxes, or your salary)
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S-Corp Salary: Input your approximate S-Corp salary, which is a requirement of S-Corp owners.
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Select Your Filing Status: Choose single, married filing jointly, or married filing separately
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State Tax Rate: Enter your state tax income tax rate
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Review Your Results: The calculator will show:
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Your current tax liability as sole prop/LLC
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Your projected tax liability as an S-Corp
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Your annual tax savings
How to Interpret the Results:
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Self-Employment Tax Savings: Shows how much you'll save on the 15.3% self-employment tax
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Payroll Tax Cost: The cost incurred by running payroll as an SCorp owner
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Federal and State Tax: Shows the total income tax amount owned to your state and federal government
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Net Annual Savings: Your total tax reduction after accounting for payroll taxes and compliance costs
Pro Tip: S-Corp distributions are generally tax-free to owners. Most S-Corp owners set their salary at the minimum reasonable amount, then take the remaining business profits as distributions. This means your total cash flow stays roughly the same as when you were an LLC owner - you're just restructuring how that income is taxed to save on self-employment taxes.
Let's Give it A Go!
Important Disclaimer
This calculator is for educational and illustrative purposes only and does not constitute tax, legal, or financial advice. The calculations provided are simplified estimates based on general tax rules and may not reflect your specific situation or all applicable tax provisions.
Professional Consultation Required: Before making any changes to your S Corporation salary structure, you must consult with a qualified tax professional or CPA
No Guarantees: We make no representations or warranties about the accuracy, completeness, or suitability of this calculator for your specific needs. Tax law is complex and subject to change, and individual circumstances vary significantly.
Your Responsibility: Any decisions you make based on this calculator are solely your responsibility. The IRS may challenge salary amounts deemed unreasonably low for S Corporation owners, potentially resulting in penalties and additional taxes.
By using this calculator, you acknowledge that you understand these limitations and will seek appropriate professional guidance before implementing any tax strategies.
By using this site and calculator, you agree to our full Terms, Conditions, and Disclaimers: Terms and Disclaimers