What does this tool do?

If you run a US business (LLC), you can be taxed in two main ways: as a regular LLC (you pay 15.3% self-employment tax on all profit) or as an S-Corporation (you pay yourself a salary, and only the salary gets payroll tax — the rest comes to you as distributions with no payroll tax). This tool shows you, side by side, how much total tax you would pay each way in 2026, and how much you could save.

Who is it for?

US freelancers, consultants, and small business owners with profit roughly $40,000+, who wonder "should I elect S-Corp status?" Also useful for CAs/accountants advising US clients.

How to use it (simple steps)

Go to the 🧮 Estimator tab.
Enter your business net profit (revenue minus expenses).
Pick your filing status (Single or Married Filing Jointly).
Enter a reasonable salary for the S-Corp scenario — what you'd pay someone else to do your job.
Optionally add other income and a flat state tax rate.
Read the side-by-side comparison and the verdict at the bottom.

Example use cases

1. Freelance developer, $120K profit: Compares full SE tax on $120K vs paying herself a $70K salary — sees roughly how many thousands of dollars the S-Corp election could save per year.

2. Consultant at $60K profit: Discovers the savings are small once ~$1,500/yr of payroll and admin costs are counted — maybe not worth the paperwork yet.

3. Agency owner at $250K: Tests different salary levels to see how the savings change, before talking to a CPA.

Uses official 2026 IRS inflation-adjusted brackets (source: Tax Foundation / IRS). Everything runs in your browser — nothing is uploaded.

Business Net Profit ($)

Filing Status

Other Income ($) — W-2, interest, etc.

S-Corp: Reasonable Salary ($)

The IRS requires a market-rate salary for the work you do — there is no official "60/40 rule". Research comparable pay for your role.

State Tax Rate % (optional, flat)

Applied equally to both scenarios (simplified). Some states levy extra S-Corp/franchise fees not modeled here.

2026 Federal Brackets Used

Rate	Single	Married Filing Jointly
10%	$0 – $12,400	$0 – $24,800
12%	$12,400 – $50,400	$24,800 – $100,800
22%	$50,400 – $105,700	$100,800 – $211,400
24%	$105,700 – $201,775	$211,400 – $403,550
32%	$201,775 – $256,225	$403,550 – $512,450
35%	$256,225 – $640,600	$512,450 – $768,700
37%	Over $640,600	Over $768,700

Standard deduction 2026: $16,100 (Single) / $32,200 (MFJ). Social Security wage base: $184,500. Additional Medicare 0.9% above $200,000 (Single) / $250,000 (MFJ). QBI: 20% deduction, phase-out threshold $203,000 (Single) / $406,000 (MFJ); minimum $400 QBI deduction for businesses with at least $1,000 of active income (new for 2026).

Non-US Resident Owning a US LLC

If you are a non-US resident (for example, living in India) and own a single-member US LLC with no US presence — no US office, no employees or dependent agents in the US, and no US "effectively connected income" (ECI) — then generally:

The LLC is "disregarded" and you typically owe no US federal income tax on income from services you perform outside the US.
You still have mandatory annual filings: Form 5472 attached to a pro-forma Form 1120. Penalty for missing it is $25,000, so do not skip this.
The estimator on this page assumes a US taxpayer — it does not apply to this situation.
Note: non-resident aliens generally cannot be S-Corp shareholders at all.

This is informational only. Whether you have US-source or effectively connected income depends on facts — confirm with a cross-border tax professional. Your home country will usually tax this income.

This tool was built by a CA & ex-Deloitte finance transformation director.

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