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.
Business Entity Tax Comparison Calculator
Compare sole proprietor, LLC, S-Corp, and C-Corp side by side with your actual numbers
Note: A single member LLC is taxed exactly like a sole proprietorship by default (Schedule C). The S-Corp and C-Corp columns assume you take a salary; the IRS requires it to be reasonable.
At these numbers, C-Corp leads with the lowest total tax. Re-run the comparison when your income, salary, or state tax rate changes — the winner often flips between $50k and $150k of net income.
Disclaimer: Simplified model only. Ignores QBI deduction, FICA wage cap behavior beyond SS cap, C-Corp retained earnings tax deferral, and entity formation/compliance costs. C-Corp can also defer tax on retained earnings instead of paying dividends. S-Corp requires payroll setup and an extra tax return. Consult a CPA for entity selection.
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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.
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