S-Corp Savings Worksheet
Print it. Fill it. Hand it to your CPA.

How to use this S-corp savings worksheet

Reviewed by the FigureNerd editorial team, with input from tax and S-corp planning practitioners across the small business space.

This worksheet is designed to do one thing: give you a structured, printable document you can bring to your CPA to start a real S-corp conversation. The six sections walk through the full comparison from raw income to net savings, section by section, so you can see exactly where the money goes and where it gets recaptured.

Fill in the numbers online and the worksheet calculates automatically. Hit "Print this worksheet" and you get a clean one-page version with your numbers filled in, formatted for handing to your CPA or filing in a folder. If you prefer to fill it out by hand, print a blank and work through it with your advisor.

Section A: Your income

Start with net self-employment profit, not gross revenue. Net profit is revenue minus legitimate business expenses: the number on Schedule C line 31 for sole proprietors, or the total distributions your LLC operating agreement reflects. If you have not filed yet, use your best estimate. The worksheet is a planning tool, not a tax return.

Section B: Sole prop tax burden

Section B shows what you pay now as a sole proprietor or single-member LLC without any election. The IRS taxes 92.35 percent of your net profit as self-employment income. That income gets hit with SE tax at 15.3 percent (12.4 percent Social Security plus 2.9 percent Medicare) up to the 2026 Social Security wage base of $184,500, then 2.9 percent Medicare above that.

One piece that surprises people: half of your SE tax is deductible on your federal return as an above-the-line deduction. That deduction reduces your federal taxable income, which is why Section B's federal tax number is slightly lower than you might expect from a flat percentage of profit.

Section C: S-corp tax burden

Section C shows what you would pay under an S-corp election, using the salary you entered. The critical difference: payroll tax only applies to the W-2 salary, not the distributions. Distributions still get hit with income tax. They just skip the 15.3 percent payroll tax piece. That is the entire arbitrage.

The employer half of payroll tax is a business deduction that reduces the taxable income flowing to your K-1, which is why Section C's federal income tax is slightly lower than a flat percentage of profit plus distributions.

Section D: Gross difference

Section D is the headline number most S-corp articles lead with: the gross tax difference between the two structures. This is real money, but it is not the full story.

Section E: S-corp administrative cost

Running an S-corp is not free. You need a payroll provider to run actual W-2 payroll. You need a CPA to file a separate Form 1120-S tax return every year. You need to maintain a registered agent and keep the state happy with annual reports. These costs vary but typically run $1,500 to $3,500 per year for a solo operator.

The default values in Section E ($800 payroll processing, $1,200 for the 1120-S return, $300 for registered agent and state fees, $200 misc) are conservative estimates for a one-owner S-corp with a payroll provider and a competent but not boutique CPA. Your actual numbers may differ.

Section F: Net annual savings

Section F is the number that matters. Gross tax savings minus admin cost. If this number is positive and significant, the S-corp election is probably worth it. If it is small (under $1,000) or negative, the math is telling you to wait until your income grows.

The S-corp election deadline and Form 2553

Filling out this worksheet is step one. Actually making the election is step two. Here is what you need to know about the timeline.

To have S-corp tax treatment apply to the full 2026 tax year, Form 2553 must have been filed with the IRS by March 15, 2026 (two months and 15 days into the tax year for calendar-year filers). If you missed that deadline, you may be able to file for a late election with a statement of reasonable cause, but it is not guaranteed.

If you are reading this in mid-2026, you are planning for 2027. File Form 2553 by March 15, 2027 for the 2027 tax year to apply from the beginning of the year. You can also file mid-year if you want S-corp treatment from the date of your entity's formation, subject to timing rules.

Form 2553 references:

• IRS Publication 542, Corporations: covers S-corp election rules and timing (IRS.gov)
• IRS Publication 535, Business Expenses: covers the deductibility of S-corp admin costs (IRS.gov)
• Form 2553, Election by a Small Business Corporation: the actual form to file (IRS.gov)

When to call a CPA instead of just filling out the worksheet

This worksheet is a planning tool. It uses simplified math, flat federal brackets, and approximate state rates. It does not account for:

• Your specific deductions (QBI deduction, retirement contributions, health insurance premiums)
• Your actual marginal bracket at each dollar of income, not a flat rate
• Multi-state filing requirements if you operate across state lines
• Existing entity obligations (if you have partners, investors, or existing agreements)
• Payroll complexity if you employ anyone other than yourself
• Timing of the election relative to your fiscal year

Use Section F as your call-to-action threshold. If the worksheet shows more than $3,000 in net savings, that justifies a paid conversation with a CPA. The cost of a one-hour consultation with a small business CPA ($200 to $400) is typically recovered in a single year if the election makes sense for your situation.

Worked example: the default $120,000 scenario

Run the worksheet's own default numbers through Sections A through F and here is what comes out. Net profit $120,000, single filer, California, salary set to the auto-filled 60 percent ratio ($72,000), with the default $2,500 in combined admin costs.

Section B (sole prop): self-employment tax comes to $16,955. After the QBI deduction ($22,304, since $120,000 sits well under the $201,750 single-filer phase-out) and California's 13.3 percent top bracket, total taxes land at $54,328, leaving $65,672 take-home.

Section C (S-corp): payroll tax on the $72,000 salary is $11,016, far less than the $16,955 SE tax bill above. But the S-corp side only earns a QBI deduction on the $48,000 in distributions ($7,998, versus $22,304 on the sole prop side), so federal tax on the remaining income runs higher. Total taxes before admin cost: $50,869, before-admin take-home of $69,131.

Section D shows the gross difference: $3,458 in the S-corp's favor. Section F nets out the $2,500 admin cost for a net annual savings of $958, and the worksheet's own break-even finder puts the crossover at $51,000 in net profit at this salary ratio and cost structure, comfortably inside the page's $50,000-$70,000 rule of thumb above.

When the S-corp math turns negative: two real scenarios

The callout above used to claim the savings were "almost always significant" above $100,000 in profit. Running the actual Sections A through F logic against two realistic scenarios shows that rule of thumb breaks in both directions: too little profit, and too much salary relative to profit.

Below the break-even line

Enter $40,000 net profit, Texas (no state income tax), single filer, 12 percent bracket, and the auto-filled 60 percent salary ratio ($24,000). Section B: sole prop tax comes to $9,221. Section C: S-corp tax before admin comes to $7,672, a gross difference of $1,549. Once the same $2,500 in admin cost comes out in Section F, net savings goes negative: -$951. At $40,000 in profit, the payroll provider and 1120-S fee cost more than the S-corp structure saves. That matches the break-even guidance above; it just means the guidance needs to be taken literally, not rounded down.

Too much salary, even above $100,000

This is the finding worth sitting with. At $250,000 net profit, married filing jointly, no state income tax, 32 percent federal bracket, running the worksheet's own salary auto-default (60 percent, or $150,000) produces a net annual savings of -$5,442, not the significant savings a quarter-million dollars in profit would suggest. Sweeping the salary input at that same $250,000 profit shows why:

• $100,000 salary (40% of profit): net savings +$4,429
• $120,000 salary (48% of profit): net savings +$480
• $130,000 salary (52% of profit): net savings -$1,494
• $150,000 salary (60% of profit, the worksheet's own auto-fill default): net savings -$5,442

The mechanism is the QBI deduction, not the payroll tax. Section C's QBI deduction only applies to distributions, never to W-2 salary. Every dollar you move from distributions into salary to satisfy the reasonable-salary rule gives up 20 percent of that dollar's QBI shelter. At a 32 percent federal bracket, giving up that shelter costs more than the payroll tax you avoid by keeping money in the lower-taxed bucket, once the salary ratio climbs past roughly the midpoint of profit. The worksheet's own 50-to-70-percent salary heuristic sits right on top of that crossover at higher income and higher tax brackets. A reasonable-salary number that is defensible to the IRS is not automatically the number that maximizes savings; run your own salary figure through Section C rather than accepting the 60 percent default once your profit passes the low six figures.

Mistakes to avoid when filling this out

• Setting salary low to maximize the number in Section F. A 20 percent salary ratio produces a bigger net-savings figure than a 60 percent ratio, because more income skips payroll tax entirely. It is also the single fastest way to draw IRS scrutiny; salary under roughly 30 to 40 percent of profit, with no market-rate documentation, is the leading S-corp audit trigger. The worksheet displays a warning under Section F once salary drops below 40 percent of profit for exactly this reason.
• Accepting the 60 percent salary default without checking Section C. As the scenario above shows, the default that auto-fills when you enter your profit is not automatically the salary that produces the largest net savings, especially once profit and your federal bracket both climb. Try two or three salary figures in the 40-to-70-percent range and compare Section F before deciding.
• Leaving Section E at the defaults when your actual costs differ. $800 for payroll, $1,200 for the 1120-S, $300 for registered agent and state fees, and $200 in other costs is a conservative planning estimate for a solo operator. A multi-state filer, an S-corp with employees beyond the owner, or a CPA who charges more for a corporate return will see a materially different Section E total, which moves the break-even point in Section F directly.
• Forgetting the QBI phase-out entirely at higher income. Both Sections B and C stop applying any QBI deduction once net profit exceeds $201,750 (single, HoH, or MFS) or $403,500 (MFJ), per Revenue Procedure 2025-32 Section 4.26. Above those thresholds the comparison simplifies (no QBI on either side), but the worksheet will silently zero out a deduction line you might expect to see, so do not assume a QBI number belongs there without checking your total profit against the threshold.
• Treating the worksheet's admin cost as the complete cost of an S-corp. Section E covers payroll, tax prep, and registered agent fees. It does not include the extra time cost of running quarterly payroll, W-2/W-3 filing, potential unemployment insurance registration in your state, or a bookkeeper if you do not already have one. Build in a buffer above Section E's total for a first-year S-corp.

FAQ: S-corp savings worksheet

What is an S-corp savings worksheet?

An S-corp savings worksheet is a structured document that walks through six sections: your gross income, your tax burden as a sole proprietor, your estimated tax burden as an S-corp, the difference between the two, your S-corp administrative costs, and your net annual savings. It is designed to be filled out and handed to a CPA as a starting point for a formal S-corp analysis.

When should I use a worksheet instead of a calculator?

A worksheet is useful when you want a printable, shareable document to bring to your CPA, when you want to fill out numbers by hand and think through each section deliberately, or when you want a structured record of your assumptions for year-over-year comparison. The interactive version on this page fills everything automatically, but you can also print a blank version and fill it by hand.

What is the S-corp election deadline for 2026?

To have S-corp tax treatment for the full 2026 tax year, Form 2553 must have been filed by March 15, 2026. For 2027 treatment, file by March 15, 2027. Late elections with reasonable-cause statements are sometimes accepted but are not guaranteed.

What is a reasonable salary for 2026?

The IRS requires S-corp owner-employees to pay themselves a salary that is reasonable for the services they perform, based on industry, role, duties, experience, and comparable wages. Most planners use 50 to 70 percent of net profit as a starting heuristic, but the only legally defensible answer is what someone in your role would earn in the open market. Below 40 percent of profit is the leading audit trigger.

Is this worksheet tax advice?

No. This is an educational planning tool. The numbers are directional and use simplified tax math. Your actual tax outcome depends on your filing status, specific deductions, state, industry, and many other factors. Use this worksheet as a conversation-starter with your CPA, not as a final tax analysis.

Why might a higher salary make my S-corp savings go negative?

Because the QBI deduction under IRC Section 199A only applies to S-corp distributions, never to W-2 salary. Moving income from distributions into salary to satisfy the reasonable-salary requirement gives up 20 percent QBI shelter on every dollar moved. At higher federal tax brackets, that lost shelter can cost more than the payroll tax you avoid, especially once salary passes roughly half of net profit. Run a few salary figures through Section C before settling on one.

What happens once my income passes the QBI phase-out threshold?

Once net profit exceeds $201,750 (single, head of household, or married filing separately) or $403,500 (married filing jointly) per Revenue Procedure 2025-32 Section 4.26, neither side of this worksheet applies a QBI deduction, and Sections B and C both show $0 on that line. The S-corp comparison above that threshold comes down entirely to payroll tax savings minus admin cost, without the QBI complication described above.

Does this worksheet account for health insurance or retirement contributions?

No. Both are real costs that interact with an S-corp election (self-employed health insurance is handled differently through an S-corp than through a sole proprietorship, and S-corp retirement plan contributions are based on W-2 salary, not total profit) but neither is built into this worksheet's six sections. Bring your health insurance premium and retirement plan target to your CPA alongside this worksheet.