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Run the numbers on an S-Corp election, self-employment tax, or your next quarterly payment. Then let a licensed IRS Enrolled Agent confirm the exact figure - free.
Estimated annual tax savings
$6,540
Self-employment tax (sole prop)$16,955
Payroll tax on S-corp salary$8,415
Gross FICA savings$8,540
Less approx payroll/admin cost-$2,000
How the S-Corp savings work
- As a sole proprietor or single-member LLC, all of your net profit is hit with 15.3 percent self-employment tax (Social Security plus Medicare).
- Electing S-Corp status lets you split profit into a reasonable salary (which pays payroll tax) and distributions (which do not pay the 15.3 percent).
- The savings shown is the payroll tax you avoid on the distribution portion, less roughly 2,000 dollars a year for payroll filing and admin.
- The salary must be reasonable for your role and industry. Setting it too low invites an IRS audit, so this is where an Enrolled Agent adds real value.
These are estimates using 2025 federal figures. Your real numbers depend on your full situation. Want the exact answer?
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