Estimated annual savings as an S-Corp
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Worth switching above
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Employment tax saved
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Extra income tax
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Your reasonable salary
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Your business
Net profit before your pay$250,000
What the business earns after all other expenses, before paying you.
Business type
Professional service means consulting, law, accounting, health, or financial services. The tax code limits their deduction at higher incomes.
Filing status
Other household income$0
A spouse's W-2 wages, for example. Pushes you up the brackets.
Your salary as an S-Corp
Salary, share of profit50%
The IRS requires "reasonable compensation" for the work you actually do. Many advisors land between 40% and 60%.
But never less than$50,000
Cost to run an S-Corp
Annual payroll & tax prep$2,400
Payroll service plus the extra 1120-S return. Typically $1,500–$4,000 a year.
One-time setup$800
Filing fees and the election. Affects year one only.
State income tax rate0.0%
Leave at zero for a federal-only view. Some states tax S-Corps separately — this does not model that.
What you'd pay each way
At your current profit
Employment tax
Income tax
S-Corp running costs
Savings at every profit level
Net of what an S-Corp costs to run, with your assumptions held constant
The salary number is where this gets real.
Reasonable compensation is the piece the IRS actually looks at, and it's specific to your role, your industry, and your hours. If the savings above look meaningful, it's worth getting the number right before you file the election.
Important disclosures — placeholder language, to be reviewed and approved by your compliance officer before this page goes live.
This calculator is provided by Cool Wealth Management for educational purposes only. It is not tax, legal, accounting, or investment advice, and it is not a recommendation to elect S-Corporation status. Cool Wealth Management does not prepare tax returns or provide tax advice; consult a qualified CPA or tax attorney about your specific situation before making an entity election.
The estimate compares a single-owner LLC taxed as a sole proprietorship with the same business taxed as an S-Corporation, using 2026 federal figures: the $184,500 Social Security wage base, 15.3% combined Social Security and Medicare rates, the 0.9% Additional Medicare Tax above $200,000 single and $250,000 married filing jointly, 2026 ordinary income brackets, the standard deduction, and the Section 199A qualified business income deduction as amended by the One Big Beautiful Bill Act — including the 20% rate, the $201,750 single and $403,500 joint thresholds, the expanded $75,000 and $150,000 phase-in ranges, the 50%-of-W-2-wages limitation, and the specified service business phase-out.
It assumes a single owner who materially participates, no qualified property basis (UBIA), no state-level S-Corp entity taxes or franchise fees, no retirement plan contributions, no self-employed health insurance deduction, no itemized deductions, no other business income or loss, no state tax on distributions differing from wages, and no payroll cost beyond the amount entered. It does not model reasonable compensation risk, the effect of lower wages on future Social Security benefits, qualified business income from other sources, multi-state apportionment, or the administrative burden of running payroll. Actual results will differ, in some cases substantially.
Cool Wealth Management is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Cool Wealth Management and its representatives are properly licensed or exempt from licensure.
This calculator is provided by Cool Wealth Management for educational purposes only. It is not tax, legal, accounting, or investment advice, and it is not a recommendation to elect S-Corporation status. Cool Wealth Management does not prepare tax returns or provide tax advice; consult a qualified CPA or tax attorney about your specific situation before making an entity election.
The estimate compares a single-owner LLC taxed as a sole proprietorship with the same business taxed as an S-Corporation, using 2026 federal figures: the $184,500 Social Security wage base, 15.3% combined Social Security and Medicare rates, the 0.9% Additional Medicare Tax above $200,000 single and $250,000 married filing jointly, 2026 ordinary income brackets, the standard deduction, and the Section 199A qualified business income deduction as amended by the One Big Beautiful Bill Act — including the 20% rate, the $201,750 single and $403,500 joint thresholds, the expanded $75,000 and $150,000 phase-in ranges, the 50%-of-W-2-wages limitation, and the specified service business phase-out.
It assumes a single owner who materially participates, no qualified property basis (UBIA), no state-level S-Corp entity taxes or franchise fees, no retirement plan contributions, no self-employed health insurance deduction, no itemized deductions, no other business income or loss, no state tax on distributions differing from wages, and no payroll cost beyond the amount entered. It does not model reasonable compensation risk, the effect of lower wages on future Social Security benefits, qualified business income from other sources, multi-state apportionment, or the administrative burden of running payroll. Actual results will differ, in some cases substantially.
Cool Wealth Management is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Cool Wealth Management and its representatives are properly licensed or exempt from licensure.