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Tax Entity Selection

Side-by-side comparison of W-2, Sole Proprietorship, and S-Corporation taxes and retirement room (2026 figures).

Primary Practice Parameters

Include W-2 Employee Comparison
Include Sole Proprietorship Comparison
1. Gross Revenue / Collections$200,000
$
2. Business Expenses$30,000
$
3. S-Corp Reasonable Comp %40%
%
4. Filing StatusSingle

QBI Threshold: $201,750

LLC/Corp with S-Election

LLC/Corp with S-Election

$200,000
($30,000)
$170,000
$68,000
$96,798
$10,404
Employee Salary Deferral(Max: $24,500)
$
Employer Profit Share / Match(Max: $17,000)
$
Total Retirement Contribution$0
$19,359
Adjusted Gross Income (Before QBI)
$164,798

This is the income base retirement contributions are calculated against, before the Section 199A QBI deduction is applied.

NET TAXABLE INCOME
$145,439
Effective Federal Tax Rate16.3%
Est. Federal Income Tax$23,639
Payroll / SE Tax Burden$10,404
Total Tax Burden$34,043
Sole Proprietor

Sole Proprietorship (Sched C)

$200,000
($30,000)
$170,000
—
—
$24,019
Employee Salary Deferral(Max: $24,500)
$
Employer Profit Share / Match(Max: $31,598)
$
Total Retirement Contribution$0
$31,598
Adjusted Gross Income (Before QBI)
$157,991

This is the income base retirement contributions are calculated against, before the Section 199A QBI deduction is applied.

NET TAXABLE INCOME
$126,393
Effective Federal Tax Rate15.1%
Est. Federal Income Tax$19,068
Payroll / SE Tax Burden$24,019
Total Tax Burden$43,087
Gross Revenue Allocation Breakdown ($)
Operating ExpensesPayroll / SE TaxesMax 401(k) RetirementQBI DeductionNet Taxable Base
LLC/Corp with S-ElectionLLC/Corp with S-Election
Net Taxable Base: $145,439
15%
21%
10%
73% Base
Gross: $200,000
Expenses: ($30,000)Taxes: ($10,404)Retirement: ($41,500)QBI: ($19,359)
Sole Proprietorship (Sched C)Sole Proprietor
Net Taxable Base: $126,393
15%
12%
28%
16%
63% Base
Gross: $200,000
Expenses: ($30,000)Taxes: ($24,019)Retirement: ($56,098)QBI: ($31,598)

Global System Tax Assumptions & Controls

SSTB Status

Specified Service Trade or Business (e.g. Medical, Dental, Legal, Consulting).

Include Defined Benefit Plan / Cash Balance Plan

Adds a manual employer defined-benefit contribution of up to $250,000 to both business scenarios. Actual plan funding depends on actuarial and plan-specific factors. S-Corp employer profit sharing is modeled at a 6% combo-plan planning cap.

Adds $8,000 to EE limit ($32,500 total) and $8,000 to Total Addition limit ($80,000 total).

$

Default $184,500 for 2026 tax year.

EE Elective Deferral 401(k) Limit
$24,500

$24,500 base 2026 employee limit

Total Combined 401(k) Addition Limit
$72,000

$72,000 total EE + ER limit

QBI Phaseout Threshold (2026)
$201,750

Single / Head of Household threshold

Medicare Tax Rate: 1.45% EE / 1.45% ER (2.9% Total)Social Security Tax Rate: 6.2% EE / 6.2% ER (12.4% Total)
* Exact IRS payroll, self-employment, QBI, and retirement limits applied dynamically.