S-Corp Truth Sheet

Everyone on the internet says "form an S-Corp and save thousands." Maxi's here for the actual math — savings minus what it really costs to run one.

Your business

Annual net business profit (after expenses, before any salary)

If S-Corp: reasonable owner salary

50%

The IRS requires S-Corp owners to pay themselves a "reasonable" salary before taking distributions. 40–60% of profit is a common starting range — your Taximum advisor will help you land on a defensible number.

Employees besides the owner (for payroll add-on cost)

Sole Prop vs. S-Corp

Staying a Sole Prop

Net profit$0

Self-employment tax (15.3%)$0

Tax cost on profit$0

Electing S-Corp

Owner salary$0

Distributions (no SE tax)$0

Payroll tax (15.3% of salary)$0

Payroll tax savings

SE tax avoided by only paying FICA on salary

Real annual savings

Tax savings minus the cost of running an S-Corp

—

What running the S-Corp actually costs

Upgrade from Solo to Maximum Value plan (covers S-Corp return)$0/yr

Payroll add-on ($75/mo owner + $25/mo per employee)$0/yr

Total added cost$0/yr

Not sure if S-Corp actually pencils out for you?

This is a rough-cut estimate. Our team at Taximum runs the real numbers — reasonable salary, entity setup, and a plan built around your actual business — starting at $8,500 for full Tax Planning.

Book a Strategy Call →

This tool gives a directional estimate only — it is not tax or legal advice. It assumes self-employment/payroll tax applies at a flat 15.3% (not accounting for the annual Social Security wage base cap, additional Medicare tax, or state-level taxes), and does not model entity formation costs, the additional S-Corp tax return itself, or your specific reasonable-compensation analysis. Actual results vary by state, income level, and how your business is structured. For exact numbers, book a call with our team at Taximum.

💗 Maxi