Electing S-corp status lets you split profit into salary and distributions, and distributions avoid self-employment tax. This shows whether the savings outweigh the added payroll and admin cost at your profit level.
Enter your name and email for instant, free access. We'll also send the occasional planning tip, no spam, and you can unsubscribe anytime.
A "reasonable" salary must reflect fair market pay for your role, the IRS scrutinizes low salaries with high distributions.
It must reflect fair market pay for the work you do. The IRS scrutinizes low salaries paired with large distributions.
Yes, payroll processing, a separate return, and more bookkeeping. This calculator nets those against the tax savings.
It varies, but savings often appear once net profit comfortably exceeds a reasonable salary. We can run your exact numbers.
No, it's a tax election. Your LLC or corporation stays the same legally.
These calculators provide rough estimates using current federal figures and general assumptions. They do not account for every credit, deduction, or your full situation, and they are not tax advice. For precise numbers, speak with a CPA.