Calculator
S corp vs. LLC calculator
Your 2026 taxes both ways, a salary range you can defend, and the profit where an S corp election starts to pay off. Every number is yours to change.
The answer
2026, Federal and Florida
The S corp saves about $4,536 a year
At a $66,000 salary, after the S corp's extra costs: LLC: $24,074 in taxes · S corp: $19,538 in taxes and costs. Break-even: the S corp starts to pay off at about $86,280 of profit at this salary.
Your S corp salary
Reasonable range: $66,000 to $110,200 (middle $94,700)
Lower salary = lower payroll tax, but higher audit risk and lower QBI and retirement limits.
Where it comes from. Employers in the Cape Coral-Fort Myers area pay general and operations managers $65,990 at the 25th percentile, $94,730 at the median and $137,690 at the 75th (BLS, May 2025). The top is held to $110,200, what the business can pay after its payroll taxes.
Why the slider starts at $66,000. It's the low end of the range: the largest savings that are still backed by what employers here pay for the same work. Moving up costs payroll tax but lowers the audit risk and raises your QBI wage limit and retirement room.
Side by side
| Item | LLC | S corp |
|---|---|---|
| Your salary (W-2) | none | $66,000 |
| Business income on your returnLLC: Schedule C. S corp: the K-1. | $120,000 | $47,645 |
| Adjusted gross income | $111,522 | $113,645 |
| QBI deduction (20%) | $15,864 | $9,529 |
| Taxable income | $63,458 | $71,916 |
| Federal income tax | $7,119 | $8,134 |
| Social Security and MedicareLLC: self-employment tax on the profit. S corp: both halves, on the salary only. | $16,955 | $10,098 |
| Additional Medicare tax (0.9%) | $0 | $0 |
| FUTA and state unemployment tax | none | $231 |
| Payroll service, tax prep, filings | none | $1,075 |
| Total taxes and costs | $24,074 | $19,538 |
| Into retirement and HSASavings, not a cost. | $0 | $0 |
| Left to spendProfit less taxes, costs, premiums and savings. | $95,926 | $100,462 |
The S corp saves $4,536 a year in taxes and costs.
QBI: LLC: below the threshold, the full 20% (up to 20% of taxable income). S corp: below the threshold, the full 20% (up to 20% of taxable income).
The savings at other profits
Show the numbers as a table
| Profit | Salary | S corp saves |
|---|---|---|
| $0 | $0 | -$1,075 |
| $6,250 | $4,664 | -$1,059 |
| $12,500 | $10,398 | -$1,131 |
| $18,750 | $16,204 | -$1,136 |
| $25,000 | $22,010 | -$1,141 |
| $31,250 | $27,816 | -$1,146 |
| $37,500 | $33,621 | -$1,082 |
| $43,750 | $39,427 | -$1,203 |
| $50,000 | $45,233 | -$1,324 |
| $56,250 | $51,039 | -$1,445 |
| $62,500 | $56,845 | -$1,566 |
| $68,750 | $62,651 | -$1,789 |
| $75,000 | $66,000 | -$1,517 |
| $81,250 | $66,000 | -$676 |
| $87,500 | $66,000 | $165 |
| $93,750 | $66,000 | $1,006 |
| $100,000 | $66,000 | $1,846 |
| $106,250 | $66,000 | $2,687 |
| $112,500 | $66,000 | $3,528 |
| $118,750 | $66,000 | $4,368 |
| $125,000 | $66,000 | $5,209 |
| $131,250 | $66,000 | $6,050 |
| $137,500 | $66,000 | $6,890 |
| $143,750 | $66,000 | $7,731 |
| $150,000 | $66,000 | $8,572 |
| $156,250 | $66,000 | $9,401 |
| $162,500 | $66,000 | $9,742 |
| $168,750 | $66,000 | $10,082 |
| $175,000 | $66,000 | $10,778 |
| $181,250 | $66,000 | $11,583 |
| $187,500 | $66,000 | $12,389 |
| $193,750 | $66,000 | $13,194 |
| $200,000 | $66,000 | $13,977 |
| $206,250 | $66,000 | $14,130 |
| $212,500 | $66,000 | $14,282 |
| $218,750 | $66,000 | $14,435 |
| $225,000 | $66,000 | $14,588 |
| $231,250 | $66,000 | $14,740 |
| $237,500 | $66,000 | $14,893 |
| $243,750 | $66,000 | $15,046 |
| $250,000 | $66,000 | $15,198 |
Health insurance, both ways
Enter your premiums under Health insurance to see the deduction, and any premium tax credit, for each.
As an S corp owner, the deduction takes four steps
- The company pays the premiums, or reimburses you for them (keep the bills and the reimbursement record).
- The payroll service adds them to your W-2 in box 1, but not boxes 3 and 5: no Social Security or Medicare on them.
- The company deducts them as wages on its 1120-S.
- You deduct them on your 1040 (Schedule 1), up to your wages from the company.
As an LLC, you simply deduct the premiums on your 1040, up to the business's net profit less half of the SE tax. Either way, no deduction for months you could have joined a subsidized plan through a spouse's employer.
Have employees? QSEHRA and ICHRA
A business with fewer than 50 full-time employees and no group plan can reimburse their individual premiums tax-free through a QSEHRA (up to $6,450 self-only or $13,100 family in 2026); an ICHRA works for any size, with no dollar cap. As an S corp owner (a more-than-2% shareholder) you can't use either for yourself: your own premiums go through your W-2 as above. A sole proprietor can't use them for themselves either. Ask about the right fit.
Every retirement plan, both ways
Solo 401(k)
- LLC
- $46,804 · saves $4,493
- S corp at $66,000
- $41,000 · saves $4,524
- S corp at $66,000
- $41,000
- S corp at $110,200
- $24,564
SEP-IRA
- LLC
- $22,304 · saves $2,141
- S corp at $66,000
- $16,500 · saves $1,584
- S corp at $66,000
- $16,500
- S corp at $110,200
- $64
SIMPLE IRA
- LLC
- $21,425 · saves $2,057
- S corp at $66,000
- $20,080 · saves $2,362
- S corp at $66,000
- $20,080
- S corp at $110,200
- $21,406
Defined benefit / cash balance (estimate)
Roughly $14,400 to $24,000 at your age. Estimate only: an actuary sets the real figure.
- LLC
- $40,500 · saves $3,888
- S corp at $66,000
- $24,000 · saves $2,304
- S corp at $66,000
- $24,000
- S corp at $110,200
- $100
Traditional IRA
- LLC
- $7,500 · saves $720
- S corp at $66,000
- $7,500 · saves $900
Roth IRA
- LLC
- $7,500 · saves $0
- S corp at $66,000
- $7,500 · saves $0
HSA
Only with a high-deductible health plan (shown at self-only).
- LLC
- $4,400 · saves $422
- S corp at $66,000
- $4,400 · saves $422
| Plan | LLC maximum | Tax saved | S corp maximum at $66,000 | Tax saved | S corp at $66,000 | S corp at $110,200 |
|---|---|---|---|---|---|---|
| Solo 401(k) | $46,804 | $4,493 | $41,000 | $4,524 | $41,000 | $24,564 |
| SEP-IRA | $22,304 | $2,141 | $16,500 | $1,584 | $16,500 | $64 |
| SIMPLE IRA | $21,425 | $2,057 | $20,080 | $2,362 | $20,080 | $21,406 |
| Defined benefit / cash balance (estimate)Roughly $14,400 to $24,000 at your age. Estimate only: an actuary sets the real figure. | $40,500 | $3,888 | $24,000 | $2,304 | $24,000 | $100 |
| Traditional IRA | $7,500 | $720 | $7,500 | $900 | same | same |
| Roth IRA | $7,500 | $0 | $7,500 | $0 | same | same |
| HSAOnly with a high-deductible health plan (shown at self-only). | $4,400 | $422 | $4,400 | $422 | same | same |
A lower salary lowers your 401(k) employer limit: as an S corp it's 25% of your W-2 salary, so each $1,000 of salary adds $250 of room (the range's $66,000 to $110,200 is shown in the last columns).
Save and compare scenarios
Run this with William
A calculator can't see your books, your plans or your other income. Bring this page to a call and we'll run your real numbers, set a salary you can defend and decide on the election's timing.
An estimate for planning, not tax advice for your situation. It uses the 2026 federal rules and Florida's, and leaves out what's listed below. Nothing you enter leaves this device.
How the salary range is set
An S corporation owner who works in the business has to take a reasonable salary before taking distributions. The IRS looks at the facts, not a formula: its Wage Compensation for S Corporation Officers (Fact Sheet 2008-25) (opens in a new tab) lists the factors courts weigh:
- Training and experience
- Duties and responsibilities
- Time and effort devoted to the business
- Dividend (distribution) history
- Payments to non-shareholder employees
- Timing and manner of paying bonuses to key people
- What comparable businesses pay for similar services
- Compensation agreements
- The use of a formula to determine compensation
Distributions paid instead of a salary can be treated as wages, with the payroll taxes, interest and penalties (Rev. Rul. 74-44). In David E. Watson, P.C. v. United States (8th Cir. 2012), an accountant who paid himself $24,000 while his firm distributed far more was held to a reasonable salary of about $91,000.
The range here starts with what employers pay for the same work: the 25th percentile to the 75th, from the Bureau of Labor Statistics' Occupational Employment and Wage Statistics (opens in a new tab) for the Cape Coral-Fort Myers area (May 2025 estimates, published in May 2026; Florida's statewide figures where BLS publishes no local estimate). It's scaled to your hours, held to the profit from your own work and to what the business can pay, and the salary starts at the low end. That's a starting point for a conversation, never a safe harbor: the right salary depends on your duties, your training and what you'd have to pay someone else to do your job.
What this leaves out
- Credits (the child tax credit and others), capital gains rates and the net investment income tax.
- The extra deductions at 65 and older, and the limits on deducting long-term care premiums by age.
- An S corporation's basis limits on losses, and owners other than you.
- One-time costs: the S corporation election ($125, or $450 late), payroll setup and the first year's return (+$75 on the fee schedule).
- Another state's rules beyond one flat rate, and local taxes.
- A defined benefit plan's real figures and fees: the estimate is rough, and only an actuary can set the contribution.
Sources and the dates they were checked
- Rev. Proc. 2025-32 (IRS, Oct. 9, 2025) (opens in a new tab): 2026 tax brackets, standard deduction, QBI threshold and phase-in, the $400 minimum QBI deduction, QSEHRA limits. Checked 2026-11-05.
- One Big Beautiful Bill Act, P.L. 119-21, sec. 70105 (IRC 199A) (opens in a new tab): QBI deduction made permanent; phase-in range widened to $75,000 ($150,000 joint) from 2026. Checked 2026-11-05.
- Social Security Administration, contribution and benefit base (Oct. 24, 2025) (opens in a new tab): 2026 Social Security wage base, $184,500. Checked 2026-11-05.
- IRC 1401, 3101, 3111 and IRS Questions and Answers for the Additional Medicare Tax (opens in a new tab): Self-employment and payroll tax rates; the 0.9% additional Medicare tax and its $200,000 / $250,000 / $125,000 thresholds. Checked 2026-11-05.
- Notice 2025-67 (IRS, Nov. 13, 2025) (opens in a new tab): 2026 limits: 401(k) $24,500, catch-ups $8,000 and $11,250, 415(c) $72,000, pay limit $360,000, DB benefit $290,000, SIMPLE, IRA $7,500 and $1,100, IRA and Roth phase-outs, Roth catch-up wage threshold $150,000. Checked 2026-11-05.
- IRS Publication 560, Retirement Plans for Small Business (opens in a new tab): The self-employed 20% reduced rate (net profit less half of SE tax), SEP and SIMPLE compensation for the self-employed. Checked 2026-11-05.
- Rev. Proc. 2025-19 (IRS, May 1, 2025) (opens in a new tab): 2026 HSA limits: $4,400 self-only, $8,750 family; high-deductible plan minimums. Checked 2026-11-05.
- Rev. Proc. 2025-25 (IRS, July 2025) (opens in a new tab): 2026 premium tax credit applicable percentages (2.10% to 9.96%). Checked 2026-11-05.
- HHS 2025 poverty guidelines (used for 2026 marketplace coverage) (opens in a new tab): $15,650 for one person, $5,500 for each additional person (48 states and DC). Checked 2026-11-05.
- Rev. Proc. 2014-41 (opens in a new tab): The circular calculation between the self-employed health insurance deduction and the premium tax credit (the iterative method). Checked 2026-11-05.
- IRC 162(l), Notice 2008-1, Form 7206 instructions, CCA 201228037 (opens in a new tab): Self-employed health insurance: the earned-income limit, the spouse-plan month rule, the 2% shareholder W-2 step, Medicare premiums. Checked 2026-11-05.
- Notice 2005-8 (opens in a new tab): HSA contributions for a 2% S corporation shareholder go through the W-2. Checked 2026-11-05.
- Florida Department of Revenue, Reemployment Tax (opens in a new tab): Florida reemployment tax (RT-6): 2.7% initial rate on the first $7,000; corporate officers are employees. Checked 2026-11-05.
- IRC 3301, 3302, 3306; IRS Topic 759 (Form 940) (opens in a new tab): FUTA: 6.0% less the 5.4% credit on the first $7,000 of each employee's wages. Checked 2026-11-05.
- IRS Fact Sheet 2008-25; Rev. Rul. 74-44; David E. Watson, P.C. v. United States, 668 F.3d 1008 (8th Cir. 2012) (opens in a new tab): Reasonable compensation for S corporation officers: the factors, and distributions recharacterized as wages. Checked 2026-11-05.
- Treas. Reg. 1.199A-3(b)(1)(vi) and 1.199A-5 (opens in a new tab): QBI reduced by half of SE tax, self-employed health insurance and retirement contributions; specified service trades or businesses. Checked 2026-11-05.
- U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2025 (opens in a new tab) (Cape Coral-Fort Myers, FL metropolitan area; Florida statewide where there is no local estimate): the 25th percentile, median and 75th percentile annual wage for each role. Retrieved 2026-11-05.
Needs review
- Florida: no personal income tax, and S corporations are generally not subject to Florida corporate income tax. An S corporation can still owe Florida tax on built-in gains or passive income that is taxed federally. Confirm for the company.
- Florida reemployment tax (RT-6): 2.7% on the first $7,000 of wages. 2.7% is the initial rate for a new employer; the Department of Revenue page carries no 2026 date, and an established employer's rate is set each year by notice.
- FUTA: 0.6% on the first $7,000 (the full 5.4% credit). Florida was not a credit-reduction state for 2025; the 2026 list is set in November 2026.
- Premium tax credit: the 2026 table (2.10% to 9.96%) and the 400% cliff. The enhanced credits ended after 2025 under current law. The House passed a three-year extension in January 2026; check whether anything has been enacted since.
- SIMPLE IRA: the higher SECURE 2.0 limits ($18,100, catch-up $3,850) for an employer with 25 or fewer employees. The age 60 to 63 catch-up for these plans is shown at $5,250; confirm with the plan's provider.
- Defined benefit / cash balance plan: the contribution range. A rough estimate (benefit at the $290,000 limit, phased in over 10 years, funded to 65 at 5%). Only an actuary can set the real figure.
- With a defined benefit plan, the 401(k) or SEP employer contribution is held to 6% of pay. The combined-plan deduction limit (IRC 404(a)(7)) has exceptions; the plan's actuary confirms it.
- Roth catch-up rule: catch-ups must be Roth when last year's FICA wages from the business were over $150,000. The calculator uses this year's salary as a stand-in for last year's. Self-employment income (the LLC) is not FICA wages, so the rule does not apply there.
Want the plain-English background first? Read LLC vs. S corp vs. C corp, or see entity setup and the S corporation election.
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Book a call and we'll set a salary you can defend, check the election's timing and file it for you.