LLC vs S-Corp Tax Comparison
See how much you could save by electing S-Corp status
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IRS requires a "reasonable salary" (typically 40-60% of net income)
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Frequently Asked Questions
When does S-Corp election make sense?
Generally, S-Corp becomes beneficial when net income exceeds $60,000-$80,000 annually. Below this threshold, the admin costs often outweigh tax savings.
What is a "reasonable salary"?
The IRS requires S-Corp owner-employees to pay themselves a reasonable salary for the work they perform. This is typically 40-60% of net business income.
What are the S-Corp admin costs?
S-Corps require separate payroll, quarterly filings, and more complex tax returns. Budget $2,000-$5,000/year for accounting and compliance.
This calculator provides estimates for informational purposes only. Consult a qualified tax professional for personalized advice.