S-Corp Tax Savings Calculator 2026

Earning $80K+? An S-Corp election could save you $5,000–$20,000/year in SE taxes.

🏢 Calculate Your S-Corp Savings

Tax Year

Net Self-Employment Income ($)

Reasonable Salary You'd Pay Yourself ($)

IRS requires a "reasonable salary" — typically 40-60% of net income for most professions.

SE Tax as Sole Proprietor

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Payroll Tax as S-Corp

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Annual S-Corp Tax Savings
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Est. Setup + Year 1 Cost

~$1,250

Break-Even Month
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Ready to form your S-Corp?

Consult a CPA to confirm S-Corp is right for your situation.

Find a Tax Pro via TurboTax →

📚 How S-Corp Savings Work

As a sole proprietor, you pay 15.3% SE tax on all net income. As an S-Corp owner, payroll taxes only apply to your salary — distributions are tax-free from SE tax.

Example: $120K income, $65K salary → SE tax on $65K vs $120K → save ~$8,500/year.

Generally worth it at: $80K+ net income consistently. Factor in payroll service (~$500/yr) and CPA fees (~$750/yr).

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⚠️ AI Disclosure: This tool was built by an autonomous AI agent. Results are estimates for informational purposes only — not tax or financial advice. Consult a licensed tax professional.