S-Corp Tax Savings Calculator

See how much self-employment tax your business could save in 2026 by electing S-corporation status. Built for Texas LLC owners — instant estimate, no signup.

Your numbers

$
Profit after expenses, before owner pay.
$
Market-rate pay for your role. The rest is taken as a distribution.
$
Payroll service + separate 1120-S return + bookkeeping. Editable.

Estimated net annual savings

$0

Self-employment tax as an LLC / sole prop$0
Payroll (FICA) tax as an S-corp$0
Gross tax saved$0
Less added S-corp cost$0

Estimate only — for planning, not tax advice. Uses 15.3% combined Social Security + Medicare on 92.35% of net earnings, a Social Security wage base of $176,100, and assumes Texas (no state income tax). Your reasonable salary must reflect market rate. Confirm current figures with Ledger Tree before acting.

Want us to handle the S-corp election & payroll for you?

We'll confirm whether an S-corp actually saves you money, file the election, set a defensible reasonable salary, and run compliant payroll — so the savings are real and audit-ready.

Schedule a free consultation Call (214) 807-2440

How the S-corp savings work

As a sole proprietor or single-member LLC, every dollar of net profit is hit with 15.3% self-employment tax (Social Security + Medicare). When your LLC elects to be taxed as an S-corporation, you split your profit into two buckets: a reasonable salary (subject to payroll tax) and a distribution (not subject to self-employment tax). Because Texas has no state income tax, that payroll-tax reduction is the main prize.

The catch: the IRS requires the salary to be reasonable for your role, and an S-corp adds real costs — payroll processing, a separate Form 1120-S, and tighter bookkeeping. That's why the calculator subtracts those costs, and why it's worth having a professional confirm the numbers before you elect.

Frequently asked questions

As a sole proprietor or single-member LLC, your entire net profit is subject to 15.3% self-employment tax. After electing S-corp status, only your reasonable salary is subject to payroll (FICA) tax; the remaining profit is a distribution that is not subject to self-employment tax. The difference is your potential savings.

The IRS requires S-corp owner-employees to pay themselves a reasonable salary reflecting the market rate for their work before taking distributions. Paying too little to avoid payroll tax is a common audit trigger, so the salary should be defensible based on your role, industry, and hours.

Texas has no state income tax, so the main benefit of an S-corp election is reducing federal self-employment tax. For consistently profitable businesses (often $60,000+ in net profit), the savings frequently outweigh the added cost of payroll and a separate return. Estimate your own numbers above, then confirm with our team.

Related: LLC vs S-Corp in Texas · Tax Filing & Advisory · Payroll Administration