Free tax calculators: Run the numbers before you commit.

The math behind an S-Corp election comes down to one shift: replacing self-employment tax on your full business profit with FICA tax on a portion of that profit you pay yourself as W-2 salary. As a sole proprietor, you pay self-employment tax on all net business income, Social Security and Medicare on both halves of FICA. When you elect S-Corp status, only the salary portion is subject to those payroll taxes. The remainder comes out as distributions, which are not.

The calculator estimates your savings by computing self-employment tax against your full net income, then comparing that to FICA on the salary you'd reasonably pay yourself. The bigger the gap between salary and total profit, the bigger the spread. There's a catch, though, the IRS requires "reasonable compensation," so I run the reasonable comp calculator alongside this one to anchor the salary input. Once savings clear roughly the cost of payroll, bookkeeping, and your S-Corp tax return, the election starts paying for itself.

Quarterly estimates exist because the federal tax system is pay-as-you-go. The IRS expects tax revenue throughout the year, not in one lump at filing. If your withholding doesn't cover what you'll owe, common for self-employed people, S-Corp owners taking distributions, or anyone with significant 1099 income. You owe an underpayment penalty plus interest.

This calculator works backward from your projected annual income. First, it figures taxable income by subtracting the standard or itemized deductions and, for self-employed filers, half of the SE tax deduction. Then it applies the federal income tax brackets, adds SE tax where applicable, subtracts withholding you've already had taken out, and divides what remains across the four IRS quarterly due dates: April, June, September, and the following January.

The amounts won't match your actual return exactly, state taxes, credits, and life events shift the picture, but they keep you in the safe-harbor zone. I aim to land within 100% of last year's tax (110% if your income is higher) so penalties never trigger.

The IRS requires S-Corp officers to pay themselves a "reasonable" salary before taking distributions. There is no fixed formula, the IRS evaluates each case on facts and circumstances, but a defensible salary draws from the same factors a wage analyst would use: what comparable W-2 employees earn doing similar work, your industry, your geographic cost of living, your hours, your experience, and what your business can sustainably support.

This calculator triangulates a starting range from those inputs. It anchors against revenue (a salary equal to most of your revenue isn't sustainable; one near zero isn't defensible), adjusts for industry compensation patterns, scales for cost-of-living differences, and bands a low/mid/high range so you can see where you sit relative to the comparables.

It is not a formal study. Real reasonable compensation studies pull from RCReports, BLS wage data, or expert testimony, and run several hundred to a few thousand dollars. This is a starting opening number to test the math against. For audit-grade defensibility on a higher-revenue S-Corp, I commission a real study.

The W-2 vs 1099 question has two sides, so this calculator switches between them. From the worker side, the headline difference is who pays payroll tax: a W-2 employee splits FICA with the employer; a 1099 contractor pays the full amount as self-employment tax. That spread is the headline number, but it ignores the value of W-2 benefits, health insurance, retirement matching, paid time off, unemployment coverage, which a contractor must self-fund or do without.

From the employer side, the math flips. W-2 means matching FICA, paying federal and state unemployment, plus the cost of any benefits offered. 1099 means just the contract rate. This calculator estimates each cost using current FICA rates and a simplified benefits estimate.

The bigger consideration isn't math, though. It's classification. The IRS, DOL, and most state agencies have strict rules about who actually qualifies as a 1099 contractor, control over work, integration into the business, exclusivity, tools, schedule. Misclassifying an employee as a contractor triggers back taxes, penalties, and interest. I always evaluate classification before optimizing tax treatment.