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S-Corporation Tax Savings Calculator

In a standard Single-Member LLC, 100% of your net profits are subject to the 15.3% federal self-employment tax (FICA). By making an S-Corp election (IRS Form 2553), only your "reasonable salary" is subject to FICA, while remaining profits pass through as dividends.

Reasonable W-2 Owner Salary 50% ($60,000)

IRS rules require S-Corp owners to pay themselves a "reasonable salary" for services performed.

Standard LLC Self-Employment Tax $18,360 15.3% on entire $120,000 profit
S-Corp Estimated Annual Savings $9,180 / yr FICA saved on dividend distributions
Form Your LLC & Prepare S-Corp Election →
Who is eligible for S-Corp status? To elect S-Corp tax status under IRS Form 2553, all LLC owners must be U.S. citizens or resident aliens (green card or substantial presence). Non-resident foreign aliens cannot own shares in an S-Corp, but can form a standard pass-through LLC or C-Corp.