Model the S-Corp election
See whether electing S-Corp status actually saves you money — after reasonable compensation, the QBI interaction and your state’s costs, not just the headline FICA number.
Enter your business profit
Start from your net business profit — pulled from your bookkeeping or bank feed — and your current structure and home state.
Step by step
The same journey, written out — so you can read it at your own pace.
- Enter your business profit
Start from your net business profit — pulled from your bookkeeping or bank feed — and your current structure and home state.
- Set reasonable compensation
The election only works if you pay yourself a defensible salary. We benchmark a reasonable range and split the rest as distributions.
- The FICA saving
As a sole proprietor you pay 15.3% on (almost) all profit. As an S-Corp, payroll tax only hits the salary — that gap is the headline saving.
- The QBI & admin catch
Paying yourself a salary shrinks your QBI deduction, and payroll, an 1120-S return and state filings cost real money. We net it all off — this is where most calculators stop short.
- Decide — and elect
A clear verdict with the numbers behind it, plus the Form 2553 deadline and the payroll you’ll need to set up if you go ahead.
Common questions
Is the saving guaranteed?
No — it depends on your profit, a defensible salary, your QBI position and your state. Below roughly $60–80k of profit the payroll, return and state costs usually outweigh the FICA saving — which is exactly what the model shows you.
What is “reasonable compensation”?
The salary the IRS expects an S-Corp owner-employee to pay themselves for the work they do. Set it too low to dodge payroll tax and you invite an audit — the model benchmarks a defensible range.
Should you elect S-Corp?
Model the salary/distribution split against your QBI deduction and state costs, and see your real net benefit.
Model it freeThis guide is general information, not personal tax advice, and reflects the rules we believe to apply as at June 2026 — rates and thresholds change. Always check your own figures against the IRS and consider a qualified adviser before acting. You remain responsible for the accuracy of anything you file.
Go deeper
The full guides and articles behind this journey.
The 15.3% SE-tax saving is real — but reasonable comp, QBI and state rules can shrink or wipe it out. Here's the math.
Brackets and the standard deduction, marginal vs effective rates, FICA, retirement accounts, capital gains and the OBBBA changes.
401(k), IRA, HSA and the rest — limits, phase-outs, the SECURE 2.0 super catch-up and OBBBA changes for 2026.
More flight plans
File your Self Assessment
From a blank return to filed-with-HMRC in one sitting — your figures pulled in, the maths checked, the SA100 submitted.
Build & file your company accounts
Turn a year of bank transactions into FRS 105 micro-entity accounts and file the iXBRL to Companies House — without a spreadsheet in sight.
File your Corporation Tax (CT600)
Carry your accounts into the CT600, let us handle marginal relief and the adjustments, and file the return plus computation to HMRC.