An S-corp election lets you split your profit into a salary and a distribution, and the distribution escapes self-employment tax. That is the whole trick. It also costs you payroll and a more expensive return, so below a certain profit it is not worth doing. This finds your line.
The side-by-side breakdown and your breakeven profit level. Enter your email and it unlocks below, plus I'll send you a copy you can keep.
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Federal figures only, using 2026 rates. This does not include state income tax, state franchise or minimum entity fees (which in some states are large enough to change the answer entirely), state treatment of S-corps, unemployment insurance on your own wages, the qualified business income phase-in limits above $201,775 single and $403,500 joint, or the specified-service-trade limits. It assumes the whole distribution is taken and that your salary is reasonable compensation for the work performed. Reasonable compensation is a facts-and-circumstances test and is the most frequently challenged element of an S-corp position. Estimates only, not tax advice. Talk to a CPA before making the election.