C corp double tax calculator
A C corporation pays tax on its profit and the owner pays again on dividends. This compares that with an S corporation in your state, with all profit paid out.
+$9,027 a year
more for a C corporation than an S corporation in California, at these numbers.
With these settings the switch does not pay at any profit from $10,000 to $500,000.
California, 2026: $100,000 profit, single filer
| Item | S corp | C corp | Change |
|---|---|---|---|
| Statement of Information (Form SI-550)sos.ca.gov, checked Oct 23, 2026 | $25 | $25 | $0 |
| Payroll tax on your salaryirs.gov, 2026 rates | $6,407 | $6,407 | $0 |
| State disability and paid leaveedd.ca.gov, checked Oct 23, 2026 | $520 | $520 | $0 |
| Payroll service and tax return (estimate) | $1,800 | $2,000 | +$200 |
| California S corporation tax (1.5%)ftb.ca.gov, checked Oct 23, 2026 | $823 | $0 | −$823 |
| California pass-through entity tax, paid by the company (elected)ftb.ca.gov, checked Oct 23, 2026 | $5,022 | $0 | −$5,022 |
| Federal income taxirs.gov, 2026 rates | $8,591 | $4,689 | −$3,902 |
| State corporate income taxftb.ca.gov, checked Oct 23, 2026 | $0 | $4,829 | +$4,829 |
| Federal corporate income tax (21%)irs.gov, 2026 rates | $0 | $10,458 | +$10,458 |
| State income taxftb.ca.gov, checked Oct 23, 2026 | $0 | $3,287 | +$3,287 |
| Yearly cost | $23,188 | $32,215 | +$9,027 |
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.
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When the C corp comes out ahead
Profit kept in the company is taxed only at the corporate rate until it is paid out. A business that reinvests most of its profit, or that raises money from investors, can be cheaper as a C corp. When a C corp makes sense.