Comprehensive Guide
Learn more in our Business & Tax Guide.
How it works
business entity cost comparison takes your inputs and produces sole prop total tax, llc total tax, s-corp total tax, s-corp savings vs sole prop. Compare costs of LLC, S-Corp, C-Corp, and Sole Proprietorship including taxes and compliance. You provide 5 inputs: Expected Net Income (currency, in dollars) (default: 100000 dollars); Reasonable Salary (S-Corp) (currency, in dollars) (default: 60000 dollars); SE Tax Rate % (percent, in percent) (default: 15.3 percent); Income Tax Rate % (percent, in percent) (default: 22 percent); State Filing Fee (currency, in dollars) (default: 200 dollars). The calculator returns 4 outputs: Sole Prop Total Tax (the primary result); LLC Total Tax (a secondary output); S-Corp Total Tax (a secondary output); S-Corp Savings vs Sole Prop (a secondary output). Business tax and finance calculations combine multiple moving parts — revenue, expenses, depreciation, tax brackets, and timing — in ways that make back-of-envelope estimates unreliable. This calculator handles the interaction of those variables precisely, so your business decisions rest on real arithmetic. With the default values, sole prop total tax is computed from the interaction of every input field — change any one of them and the result updates immediately, so you can stress-test different scenarios without re-entering the whole form. Adjust the inputs to match your real financial situation. The defaults are realistic starting points, but every person's circumstances differ — your actual income, expenses, rates, and timelines will produce a different answer. Use the tool iteratively: start with the defaults, then change one variable at a time to see which factor has the largest impact on your outcome.Tips
- Start with the default values to see a baseline result, then change one input at a time to understand which factor matters most for your outcome.
- Replace every default with your actual number — estimates and rules of thumb produce estimates, not answers. Pull your real figures from pay stubs, statements, or account dashboards.
- Run the numbers quarterly, not annually. Tax brackets, revenue, and expenses shift throughout the year, and adjusting early is far cheaper than correcting at year-end.
Frequently asked questions
When should I switch to S-Corp?
When net income consistently exceeds $40K-$50K/year. The SE tax savings outweigh S-Corp compliance costs (~$1K-$2K/year).
What does the business entity cost comparison calculate?
It takes expected net income, reasonable salary (s-corp), se tax rate %, income tax rate %, state filing fee as inputs and computes sole prop total tax, llc total tax, s-corp total tax, s-corp savings vs sole prop. The primary output is sole prop total tax. Compare costs of LLC, S-Corp, C-Corp, and Sole Proprietorship including taxes and compliance.
How accurate are the calculator results?
The math is exact — the same formulas a financial professional would use by hand. The precision of the output depends entirely on how realistic your inputs are. Use your actual numbers rather than estimates when possible. The defaults are reasonable starting points, but your real income, rates, and timeline will produce a different result.