Business structure switching calculator
Pick a state, your structure now and the one you are thinking about. The result shows the yearly saving at your profit, where the switch starts to pay, and which taxes and fees change.
$3,739 a year
saved by switching from a sole proprietorship to an LLC taxed as an S corp in California, at these numbers.
Switching from a sole proprietorship to an LLC taxed as an S corp starts to pay at about $57,500 of profit, with the same settings. Setting up costs $70 once in state filing fees. As an LLC taxed as an S corp this uses the state's pass-through entity tax election, which lowers the cost here.
California, 2026: $100,000 profit, single filer
| Item | Sole prop | LLC as S corp | Change |
|---|---|---|---|
| Self-employment taxirs.gov, 2026 rates | $14,130 | $0 | −$14,130 |
| Federal income taxirs.gov, 2026 rates | $8,235 | $8,593 | +$358 |
| State income taxftb.ca.gov, checked Oct 23, 2026 | $4,551 | $0 | −$4,551 |
| Statement of Information (Form LLC-12)sos.ca.gov, checked Oct 23, 2026 | $0 | $10 | +$10 |
| Payroll tax on your salaryirs.gov, 2026 rates | $0 | $6,407 | +$6,407 |
| State disability and paid leaveedd.ca.gov, checked Oct 23, 2026 | $0 | $520 | +$520 |
| Payroll service and tax return (estimate) | $0 | $1,800 | +$1,800 |
| California S corporation tax (1.5%)ftb.ca.gov, checked Oct 23, 2026 | $0 | $823 | +$823 |
| California pass-through entity tax, paid by the company (elected)ftb.ca.gov, checked Oct 23, 2026 | $0 | $5,024 | +$5,024 |
| Yearly cost | $26,916 | $23,177 | −$3,739 |
What these figures count
- State income tax, and state taxes on the business itself: franchise, LLC, S corp, gross receipts and excise taxes.
- Social Security and Medicare on both sides of an owner salary, federal unemployment tax and the state's new-employer rate.
- The 20% qualified business income deduction with its income limits and the professional-service rule.
- Yearly report fees, and a cost you can change for payroll and the business tax return.
Many S corp calculators leave out state taxes and the QBI deduction, which can make the election look better than it is.
Want an accountant to look at it? It's free
On your numbers the cheapest structure is another one, at a year less than the one you have now. Leave your name and email and a vetted accountant in California can go over it with your real books. You pay nothing for that first talk.
How it works
Each structure's yearly cost is federal and state income tax, Social Security and Medicare, state entity taxes and filing fees, with 2026 figures. The method and the federal figures are on how it works. Each state page lists its own figures and sources.