LLC vs S Corp Tax Calculator
Compare the tax differences between a standard Disregarded Single-Member LLC and an S-Corporation tax election (IRS Form 2553). Find your exact breakeven profit threshold.
This S-Corp calculation tool is engineered strictly for informational and comparative estimation purposes based on 2026 IRS federal tax brackets and FICA thresholds. It does not constitute formal accounting, legal, or certified CPA tax advice. Actual tax obligations depend on state franchise nexus, reasonable salary audit criteria, health insurance deductions, and individual business circumstances. Always consult a licensed Certified Public Accountant (CPA) or tax attorney prior to executing an S-Corp election (Form 2553).
LLC vs S-Corp Frequently Asked Questions
An S-Corp election typically makes financial sense once net business profit consistently exceeds $60,000 to $80,000 per year, when tax savings outpace the additional payroll and accounting overhead.
Yes. A standard single-member LLC is taxed as a disregarded entity where 100% of profit is subject to 15.3% self-employment tax. An S-Corp pays payroll tax only on W-2 officer salary, distributing the remaining profit tax-free of FICA.
Side-by-Side Entity Feature Comparison
| Feature / Characteristic | Standard Single-Member LLC | S-Corporation (Form 2553) |
|---|---|---|
| IRS Tax Classification | Disregarded Entity (Schedule C) | Pass-Through S-Corp (Form 1120-S) |
| Self-Employment Tax | 15.3% on 100% of Net Profit | 15.3% on W-2 Salary ONLY |
| Payroll Requirement | None (Owner draws only) | Mandatory W-2 Payroll for Owner |
| Annual Overhead | Low ($50 - $300 state report) | Moderate ($1,500 - $2,500 payroll/tax prep) |
| Ideal Net Profit Range | Under $60,000 / year | $70,000 to $250,000+ / year |