Business Tax Calculator
Compare corporate and pass-through tax structures for LLCs, Sole Proprietorships, S-Corporations, and C-Corporations to minimize overall tax liability.
Business Tax Liability & Profit
Business Entity Taxation Formulas
C-Corp Tax = Net Profit × (21% Federal + State Corp %) | S-Corp Tax = (Owner Salary × 15.3% FICA) + (Net Profit × Owner Tax Rate %) | LLC Tax = (Net Profit × 92.35% × 15.3% SE) + (Net Profit × Owner Rate %)- C-Corporation: Pays a flat 21% federal corporate tax plus state corporate taxes at the entity level, but distributions to owners are subject to double taxation on dividends.
- S-Corporation: Pass-through entity where owner draws a reasonable W-2 salary (subject to FICA) and takes remaining profits as distributions exempt from self-employment tax.
- Sole Proprietorship / LLC: 100% of profit passes through to owner personal returns, subject to both self-employment tax and income tax.
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Federal corporate tax rate is a flat 21% under the Tax Cuts and Jobs Act.
Frequently Asked Questions
When does electing S-Corp status save money over an LLC?
Generally, once an LLC reaches $60,000 to $80,000+ in net profit, electing S-Corp tax status can save thousands in self-employment taxes by allowing the owner to pay themselves a reasonable salary and take remaining profits as distributions exempt from the 15.3% FICA tax.
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