What is the difference between LLC and S-Corp?

An LLC is a legal business structure. S-Corp is a tax election. Many LLCs choose S-Corp taxation to reduce self-employment tax once profit gets high enough.

At what income does an S-Corp make sense?

A lot of owners start reviewing the S-Corp option around $40,000 to $60,000 in net profit, because that is where the tax savings can begin to outweigh the added admin costs.

What is a reasonable salary for S-Corp?

Reasonable salary means paying yourself an amount that roughly matches what someone would earn for doing the same work. Many owners start by modeling 40% to 60% of net profit, then reviewing with a CPA.

LLC vs S-Corp Tax Calculator

Q: How much does it cost to run an S-Corp?

A realistic annual range is often $1,500 to $3,000 once you include payroll software, CPA help, registered agent costs, and state filing fees.

Q: Can a single-member LLC elect S-Corp status?

Yes. A single-member LLC can often elect S-Corp taxation if it meets the IRS rules and files the proper forms on time.

This free tool helps freelancers, consultants, and small business owners estimate how much they could save by electing S-Corp taxation. Enter your numbers, compare the tax hit, and see whether an S-Corp is likely worth a closer look.

Updated for 2025 No signup Works in browser only

Best for freelancers, solo consultants, agencies, and service businesses trying to figure out when an S-Corp election starts making financial sense.

Your estimated result

Includes estimated 2025 state income tax for your selected state plus a flat $2,000 yearly S-Corp maintenance estimate.

Your LLC tax burden

Your estimated S-Corp tax burden

Included estimated state income tax

Annual savings after S-Corp costs

Reasonable salary assumption

Remaining profit as distribution

This is an estimate. Consult a CPA for your specific situation.

Shareable URL

Why owners use this calculator

To see when self-employment tax starts getting expensive enough to justify extra admin
To estimate whether the S-Corp election is probably too early, worth reviewing, or strongly worth considering
To pressure-test the idea before paying for payroll, tax prep, and filing support

Common examples

Freelancers at $50k profit often see only a modest benefit. Solo consultants and agencies at $80k+ profit usually start seeing stronger savings. Higher-profit low-overhead service businesses often have the clearest upside.

What does this mean?

If your savings number is strongly positive, it usually means your business profit is high enough for the S-Corp structure to reduce your self-employment tax bill in a meaningful way.

If your result is close to zero, the tax savings may get eaten up by payroll software, bookkeeping, state fees, and CPA work. That is common in the $40,000 to $60,000 profit zone.

If your result is negative, your income may still be too low for an S-Corp to make sense. In that case, staying as an LLC for now can be the simpler move.

Next reads

Quick FAQ

Can a single-member LLC elect S-Corp status?

Yes. A single-member LLC can usually elect S-Corp taxation by filing the proper IRS forms, assuming it meets the normal eligibility rules.

How much does it cost to run an S-Corp?

A realistic yearly range is often $1,500 to $3,000 once you include payroll, tax prep, and state filings.

What does this calculator assume?

It uses the self-employment tax formula on LLC profit, assumes reasonable salary equals 40% of net profit capped at $160,200, applies estimated 2025 state income tax based on your selected state and filing status, and subtracts a flat $2,000 yearly S-Corp maintenance cost.