KLOORALLC vs S Corp Tax Calculator
Estimate how much self employment tax an S corporation could save compared with a sole proprietor or LLC.
How to use LLC vs S Corp Tax Calculator
- Enter your values in the fields.
- The results update instantly as you type.
- Note or copy the numbers you need.
Features
- Instant results
- Free, no signup
- Runs in your browser, nothing is uploaded
- Works on phone and desktop
How it works
As a sole owner, self employment tax is about 15.3 percent of 92.35 percent of profit (up to the Social Security cap). With an S corp you pay 15.3 percent of your salary only. The difference minus added costs is the saving.
Worked example
On 150,000 of profit and a 70,000 salary, savings are roughly 10,500 before extra costs and about 8,000 after them.
Good to know
This ignores state taxes, the qualified business income deduction and retirement plan effects. These are planning estimates, not tax or legal advice. Rules and limits change, so confirm at irs.gov, uscis.gov, ssa.gov or with a professional.
Frequently asked questions
How does an S corp save tax?
You pay payroll tax on a reasonable salary only. The rest of the profit is not subject to the 15.3 percent self employment tax.
What is a reasonable salary?
The IRS expects pay similar to what you would pay someone else for the work. Talk to a CPA.
Is the LLC vs S Corp Tax Calculator free?
Yes. It is free, needs no signup and works on any device.