S corp tax calculator: what the election saves you after payroll tax, the 20% deduction and running costs
A mini version of the tax model we build for clients. Enter your profit and see your 2026 federal tax as a sole proprietor and as an S corp at three salary levels.
Federal only. State and city taxes are not included and can change the answer.
What you get
- A range for the yearly difference, after a running cost you can change
- A table of your tax at three salary levels, because the answer moves with salary
- The main reason for the result, in words
- Every assumption and a list of what is left out
Book a tax model call
The calculator runs on one profit figure. The full model runs on your books, your state, your household income and a salary that fits your work. Twenty minutes, and you leave knowing whether the full model is worth building.
S corp tax questions
It depends on your profit and on the salary you pay yourself. This calculator works out your federal tax as a sole proprietor and as an S corp at three salary levels, after payroll tax, the 20% deduction and a yearly running cost, and shows the difference as a range.
When the payroll tax you save is smaller than the income tax and running cost the S corp adds. Salary you pay yourself is left out of the income the 20% deduction is based on, so a higher salary means a smaller deduction. The table shows where that happens for your numbers.
An S corporation has to pay an owner who works in the business reasonable compensation before it pays distributions. The IRS gives no percentage or dollar floor. It looks at your duties, time, training and experience, and what comparable businesses pay for similar work. The salary points here are assumptions.
File Form 2553 no more than 2 months and 15 days after the start of the tax year the election is to take effect, or at any time during the tax year before it. A late election generally takes effect the following tax year unless relief is granted.
New York City has no S corporation election and does not recognize the New York State one. Federal S corporations are generally subject to the city's general corporation tax. This calculator is federal only and does not include that tax, which is one reason a New York City owner should get the full model.
An S corp runs payroll for its owner and files its own tax return. The calculator subtracts a yearly cost for both. The default is $2,500, which is an assumption. Change it to what you would pay.