$ECC
⚖️

Business Entity Tax Comparison Calculator

Sole proprietor, LLC, S-Corp, C-Corp — which entity saves you the most? This calculator compares all four side-by-side with your actual numbers.

C-Corp vs. S-Corp Tax Calculator

Compare the total tax impact of C-Corp double taxation vs. S-Corp pass through taxation

🏢S-Corp Total Tax
$63,662
31.8% effective
🏛️C-Corp Total Tax
$53,757
26.9% effective
⚖️Difference
$9,905
C-Corp is cheaper
S-Corp Breakdown (Pass Through)
Gross Income$200,000
FICA on Salary$30,600
Federal Income Tax$33,062
Total Tax$63,662
Effective Rate31.8%
C-Corp Breakdown (Double Taxation)
Corporate Taxable Income$84,700
Corporate Tax (21%)$17,787
Personal Tax on Salary$13,170
FICA on Salary (Employee)$15,300
Tax on Dividends (15%)$7,500
Total Tax$53,757
Effective Rate26.9%

C-Corp saves $9,905 at this income level, typically when retaining significant earnings and paying low dividends.

Disclaimer: S-Corp is pass through: all income taxed once at personal rates. C-Corp faces double taxation: 21% corporate tax + personal tax on salary and dividends. Dividend tax assumes qualified dividends at 15%. Does not include state taxes, QBI deduction, or additional Medicare taxes. Consult a tax advisor for entity selection.

Frequently Asked Questions

Which business entity pays the least in taxes?+

It depends on your income level. Below $50k: sole prop or LLC is simplest. $50k-$150k: LLC with S-Corp election often saves the most. Above $150k: S-Corp usually wins. C-Corp (21% flat rate) can work for high-income businesses reinvesting profits, but double taxation makes it rare for solopreneurs.

What are the filing requirements for each entity?+

Sole Prop: Schedule C on 1040, self-employment tax. LLC: State filing + Schedule C. LLC (S-Corp): Form 1120-S, K-1, payroll. C-Corp: Form 1120, double taxation. S-Corp has the most compliance requirements: payroll, separate return, and annual state filings.

Can I switch my business entity later?+

Yes. You can convert between entities, though it's easier to go from sole prop → LLC → S-Corp than the reverse. The IRS allows LLCs to elect S-Corp taxation with Form 2553 (filed by March 15 for the current year). This is the most common tax-saving move for growing freelancers.

Which business entity pays the least in taxes?

It depends on your income level. Below $50k: sole prop or LLC is simplest. $50k-$150k: LLC with S-Corp election often saves the most. Above $150k: S-Corp usually wins. C-Corp (21% flat rate) can work for high-income businesses reinvesting profits, but double taxation makes it rare for solopreneurs.