Is an S-Corp Worth It?

Delta CPA Group — Is an S-corp Worth It?
Delta CPA Group
Delta tools
№ 2 · S-corp Calculator

Is an S-corp worth it?

If you’re self-employed, every dollar of profit pays self-employment tax on top of income tax. An S-corp election can change that math — you take part of the profit as salary, part as a distribution, and the distribution skips the employment tax. Here’s how it lands for your numbers.

This is tax-cost math only — 2026 rates; pick your year in the panel below. The legal side of entity structure belongs to your attorney (more on that below).

Your business

2025 for last year’s return · 2026 for this year’s planning.
What the business clears in a year, after expenses, before any owner pay.
$
The IRS requires a fair-market salary for the work you actually do. Where it lands is the heart of this decision — and exactly what a Delta review settles.
45% of profit$54,000
Worth pausing here: a salary this low relative to profit is the kind of split the IRS challenges. Reasonable compensation has to hold up on its own — we set it with you using real benchmarks, not a slider.
Payroll service, the S-corp tax return, bookkeeping lift. $1,800–$3,500 is typical — we default it honestly rather than hide it.
$
For the five-year view. Flat is fine — enter 0.
%
Your comparison lands here.
Enter your profit — even a round number — and press Run the comparison.
Estimated employment-tax savings, year one
$0

Today: sole prop / LLC

As an S-corp

The five-year view — because one year never decides it

We never recommend a move that wins this year and loses over the next two. Here’s the annual saving if profit grows as you entered — and the cumulative total.

Estimate only — a Delta review is required before acting. The S-corp answer depends on your whole picture — reasonable comp, retirement plans, QBI, health insurance, state taxes, exit plans. This calculator shows the headline mechanic; the decision needs the full review.
One boundary, stated plainly: whether to form an entity, and what kind, is a legal and asset-protection decision — that belongs with your attorney, and we’ll gladly coordinate with them. What you see here is strictly the tax-cost math.

What this estimate assumes — out in the open

  • Employment taxes only. Sole prop side: 15.3% self-employment tax on 92.35% of profit up to the $184,500 Social Security wage base, 2.9% Medicare above it. S-corp side: 15.3% FICA on the salary (your half plus the company’s half) plus federal unemployment.
  • Income tax is not compared here. The two structures also differ on the QBI deduction, the half-SE-tax deduction, and retirement plan math — those can move the answer in either direction. That’s the multiyear part of the Delta review.
  • The salary must be defensible. The IRS expects reasonable compensation for the work you do. If the split only works with an unreasonably low salary, it doesn’t work.
  • Costs are counted, not hidden. The comparison subtracts the real cost of payroll and the extra return every year.
  • Not modeled: the additional 0.9% Medicare tax, state unemployment detail, Indiana county tax, health-insurance add-backs, and multi-owner situations.
  • 2026 figures — Social Security wage base $176,100 (2025) / $184,500 (2026); growth projection holds today’s law constant.

Numbers this size deserve a real answer. Delta will run yours properly.

The calculator shows the mechanic — the review shows the decision: the right salary, the QBI effect, the retirement angle, and whether the move holds up over the next several years, not just this one. Send it over and we’ll tell you where it actually lands.

Reach your Delta team at (260) 440-2747 or info@deltacpagroup.com and we’ll walk through it with you.

There’s real money in getting this decision right — and real cost in getting it wrong. We are always happy to talk it through.

Thank you,
Amy Grego, CPA Delta CPA Group, LLC · (260) 440-2747
Delta CPA Group, LLC · 14413 Illinois Rd., Suite B, Fort Wayne, IN 46814 · (260) 440-2747 · http://www.deltacpagroup.com Clarity. Strategy. Results.
>