How much would S-Corp election save you in taxes?
Enter your business profit and a reasonable owner salary. We calculate the self-employment tax you would save by electing S-Corp status (IRS Form 2553) vs staying on default LLC pass-through taxation.
Three things that make S-Corp savings calculator useful in the real world.
Not a calculator that ships you to a paywall after the result.
Plug in your real numbers
Net income, state, and filing status. We compute the SE-tax delta against staying default LLC.
See the actual breakeven
We surface the income point where the payroll cost flips the math in favor of S-Corp.
File when you are ready
One click to Form 2553 with the IRS. Penalty-free guarantee covers the deadline.
Your numbers
Where the savings come from.
By default, an LLC owner pays self-employment tax (15.3% combined Social Security + Medicare) on the entire net profit. At $120,000 net profit, that is about $16,948 in SE tax alone (the 15.3% applies up to the Social Security wage base of $168,600 for 2026).
With an S-Corp election (filed via IRS Form 2553), the owner is treated as both shareholder and employee. The owner pays themselves a "reasonable salary" via payroll, which is subject to payroll tax (15.3% combined employer + employee FICA). The remaining profit is taken as a distribution, which is NOT subject to self-employment tax.
At $120,000 net profit with a $60,000 salary: payroll tax applies to $60,000 (around $9,180), and the remaining $60,000 distribution is exempt from SE tax. Savings: about $7,768 per year.
Important caveat: the IRS requires the salary to be "reasonable" for the work performed. Setting an unreasonably low salary to maximize distributions is a known audit trigger. Most CPAs recommend 40 to 60 percent of net profit as a defensible salary, depending on the industry and the owner's actual work.
The thresholds where it is worth it.
Below $50-60k net profit, S-Corp election usually is not worth the payroll complexity (~$40/mo + year-end filings). Between $60-80k, the math starts working. Above $80k, the savings typically justify the election decisively. Above $168,600 (the SS wage base), savings cap on the Social Security portion but Medicare savings continue.
Common questions.
How accurate is this calculator?
What is "reasonable compensation"?
Do I have to be an LLC first?
When is the deadline to file Form 2553?
What does it actually cost to be an S-Corp?
Can I undo an S-Corp election?
What states do not recognize federal S-Corp election?
What if I have multiple shareholders?
Make the savings real.
We file IRS Form 2553 for $99, or include it on the Growth plan. Setup takes about 15 minutes; the election applies for the current tax year if filed before March 15.
On the $129/yr Compliance Annual Filings plan, we cover state late fees.
When you autofile your annual report through the $129/yr plan and we miss the deadline, we pay the state's late fee. The guarantee applies to that specific plan and the filings it includes. Other File.Business services are billed at the prices on this page.