S-Corp Tax Savings Calculator

S-Corp election saves SE tax on distributions above reasonable salary, common for high-income solopreneurs.

Total profit

Reasonable salary

SS wage base

Payroll service cost

Annual SE tax savings

$9,119

Sole prop SE tax

$21,194

S-Corp FICA tax

$11,475

How the math works

Sole SE = profit × 92.35% × (12.4% SS + 2.9% Med). S-Corp FICA = salary × (12.4% SS + 2.9% Med).

$150k sole = ~$19,645 SE. $75k S-Corp salary = $11,475 FICA. Savings $7,570 net of payroll service.

How to Use

Enter total profit.
Enter reasonable salary.
Enter ss wage base.
Enter payroll service cost.
Read annual se tax savings.

Frequently Asked Questions

S-Corp election economics?

Sole prop: all income subject to 15.3% SE tax (12.4% Social Security up to $168,600 + 2.9% Medicare always + 0.9% additional Medicare > $200k single). S-Corp: only reasonable salary subject to FICA, distributions exempt from SE tax. IRS: 'reasonable salary' must reflect market rate (40–60% of profit typical guidance). Payroll cost: $300–1,500/yr for service. Election cost: $200–1,500 setup. Compliance: separate tax return (1120-S). Worth it: typically $50k+ profit above salary level.

How is this tax impact computed?

Tax outcomes depend on filing status, income bracket, depreciation schedule, basis adjustments, AMT exposure, and state conformity. Real estate tax planning typically involves cost segregation, 1031 exchanges, opportunity zone, depreciation recapture, passive activity rules, and entity structure (LLC vs partnership vs S-corp). This calculator provides directional analysis — final position requires CPA review.

State conformity?

States vary on conformity to federal tax code: California, NY, MA decouple selectively. Bonus depreciation: most states reduce or eliminate. QBI: most states don't conform. Section 1031: federal-only deferral, some states require state-level recapture. Property tax cap: state-specific (CA Prop 13, MI Headlee, FL SOH). Multi-state property requires apportionment analysis.

When to prioritize this strategy?

Tax strategies have setup cost, complexity, and audit risk. Cost segregation: $5–15k study, materially helps high-basis investors. 1031: 45/180 day deadlines, identification rules, qualified intermediary fees. Opportunity Zone: long hold required. Stack strategies: don't double-count benefits. CPA + tax attorney coordination essential for $1M+ strategies.