Calculator
Should my business be an S Corp?
Compare total tax as a sole proprietor or single-member LLC against an S Corporation paying you a reasonable salary. Includes payroll taxes, the 20% QBI deduction you give up on wages, Utah income tax, and the extra cost of running payroll.
Schedule C line 31, or your QuickBooks net income plus owner draws.
$60,000 a year. Base this on what you would pay someone else to do your job.
Used for the Social Security wage base and Additional Medicare tax.
Payroll service, state unemployment, extra return prep (Form 1120-S).
An S Corp election likely lowers your total tax.
Comparison, 2026
| Tax | Sole prop / LLC | S Corp |
|---|---|---|
| Self-employment tax | $21,194 | - |
| Payroll taxes on salary (both halves + FUTA) | - | $9,222 |
| QBI deduction | $27,881 | $17,074 |
| Federal income tax on business income | $24,535 | $28,225 |
| Utah income tax | $6,203 | $6,469 |
| Total tax on this income | $51,933 | $43,916 |
Tax saved
$8,017
Less added costs
-$2,500
Net yearly savings
$5,517
Effect of salary
A lower salary saves more payroll tax, but the IRS requires reasonable pay for the work you do.
Salary 30%
$45,000
$8,219
Salary 40%
$60,000
$5,517
Salary 50%
$75,000
$2,815
Salary 60%
$90,000
$113
Assumptions
- Social Security wage base $184,500; Additional Medicare tax of 0.9% above the threshold for your filing status.
- Federal income tax uses your marginal bracket on this income only. Half of SE tax is deducted for the sole proprietor; employer payroll tax is deducted by the S Corp.
- QBI is 20% of qualified income. S Corp wages do not count as QBI, which is why income tax rises a little under an S Corp.
- Retirement contributions, health insurance and state unemployment rates vary and are not modeled. They can move the answer either way.
- This is an estimate, not advice for your return. Also check the Utah PTE election, which only S Corps and partnerships can make.