Get a simplified estimate of your business's income tax based on entity type — sole proprietorship, LLC, S-Corp, or C-Corp.
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Enter your business income and entity type, then click Calculate to see results.
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The business tax calculator gives founders and small business owners a fast, simplified estimate of the income tax their business owes based on entity type — sole proprietorship, single-member LLC, partnership, S-Corp, or C-Corp. Enter your net business income, your personal effective tax rate, and your state rate, and it returns total estimated tax, effective tax rate, and after-tax income in seconds. This is a planning estimate, not a substitute for a licensed tax professional.
Because each business structure is taxed differently, the same net profit can lead to very different tax outcomes depending on how the business is organized. Pass-through entities — sole proprietorships, single-member LLCs, partnerships, and S-Corps — don't pay income tax at the entity level; profit flows through to the owner's personal return and is taxed at the owner's personal rate. A C-Corporation is a separate taxpayer that pays a flat 21% federal corporate rate on its profit. This calculator mirrors exactly that split.
This tool is useful for entrepreneurs comparing entity types before incorporating, freelancers weighing an LLC vs. an S-Corp election, established small business owners estimating what they owe before quarterly estimated tax deadlines, students and advisors studying how entity choice changes tax outcomes, and anyone who wants a quick planning number before talking to an accountant or CPA. If you need the self-employment tax layer for a sole proprietorship or partnership, pair this with the Self-Employment Tax Calculator; if you collect sales tax on invoices, the Business Sales Tax Calculator covers that separate transaction tax.
Entity choice is one of the biggest levers on how much of your business profit you actually keep. Pass-through taxation avoids double taxation but ties your business tax rate to your personal bracket, while C-Corp status locks in a flat 21% federal rate but exposes distributed profit to a second layer of shareholder-level tax — the "double taxation" this calculator notes but does not model. Run the same net income through each entity option to see how much the structure alone changes the estimate, then bring the numbers to a professional for a filing-level answer.
The formula depends on whether your entity is pass-through or a C-Corporation
Pass-through entities are taxed once, on the owner's personal return, at personal rates. C-Corps pay a flat 21% federal rate at the entity level, separate from the owner's personal taxes.
C-Corp profit distributed as dividends is taxed again at the shareholder level. This calculator only estimates the entity-level tax, not the second layer paid by shareholders.
The Qualified Business Income deduction, credits, and the Alternative Minimum Tax can significantly change a real tax bill. This tool is a starting estimate, not a substitute for professional advice.
From entity choice to a full tax estimate in under a minute
Choose Sole Proprietorship / Single-Member LLC, Partnership / Multi-Member LLC, S-Corporation, or C-Corporation. The first three are pass-through entities taxed at your personal rate; C-Corp switches to the flat 21% federal corporate rate.
Input your net business income or taxable profit for the year — total revenue after deductible business expenses. This is the tax base the calculator applies rates to.
For pass-through entities, enter your personal effective federal income tax rate (total federal tax divided by taxable income), not your marginal bracket. This field is ignored when C-Corporation is selected — the label updates to remind you.
Input the state income or corporate tax rate that applies to your entity in your state. It is applied to net income for every entity type, so choose the rate that actually applies to your structure.
See Total Estimated Tax, Effective Tax Rate, After-Tax Income, and the State Tax Portion at a glance, all computed from the exact formulas in this guide.
Check the itemized tax breakdown table, remember the estimate ignores QBI, credits, and self-employment tax, and click Export Result to download a plain-text summary for your records.
The same $90,000 of profit, run through two entity structures
Suppose your small business cleared $90,000 in net income last year. You are comparing how that same profit is taxed as a sole proprietorship versus a C-Corporation. Your personal effective federal rate is 24% and your state rate is 5%.
Explanation: On the entity-level estimate alone, the C-Corp shows a lower tax ($23,400 vs. $26,100) because the flat 21% federal corporate rate is lower than the 24% personal rate used for the pass-through. But that comparison is incomplete: the C-Corp figure does not include the second layer of shareholder tax on profit paid out as dividends, and the sole proprietorship figure does not include self-employment tax. Add the 15.3% Social Security and Medicare levy a sole proprietor pays on net self-employment earnings and the pass-through picture shifts — which is why the S-Corp salary-vs-distribution structure exists. Use the Self-Employment Tax Calculator to add that layer before you conclude which entity wins.
Sanity check: the effective rate always equals total tax divided by net income, so it lands exactly on the entered federal-equivalent rate plus the state rate: 26% for the C-Corp (21% + 5%) and 29% for the sole prop (24% + 5%). These match the calculator's own output line for line.
What your effective tax rate and after-tax income actually tell you
Your effective tax rate — total estimated tax divided by net business income — is the single most useful number for comparing entity structures, because it condenses the federal and state components into one percentage. These are general reference bands, not a formal industry standard.
| Effective Tax Rate (entity-level) | General Read | Typical Context |
|---|---|---|
| Under 20% | Low | C-Corps in low-tax states, or pass-through owners in lower personal brackets |
| 20% – 30% | Moderate | Typical combined federal + state estimate for many small businesses |
| Over 30% | High | Higher-bracket pass-through owners, or states with high income/corporate rates |
How the comparison moves with income: because this calculator applies flat entered rates, the entity comparison depends on the personal rate you enter, which in reality rises with income through the federal brackets. At low profit, a pass-through owner's effective rate tends to be low, often below 21% plus state tax. As profit climbs into higher brackets, the pass-through effective rate can exceed the C-Corp's flat 21% — at which point the C-Corp structure looks cheaper at the entity level, before the dividend layer is considered. Run your own numbers at the income level you expect, not a guess.
For after-tax income: this is net business income minus total estimated tax — roughly what remains in the business before any personal draws, salary, or reinvestment. It gives you a starting point for a year-end reserve, a quarterly payment budget, or a business-plan projection.
Risk considerations: this estimate ignores the QBI deduction, tax credits, the Alternative Minimum Tax, self-employment tax, and the S-Corp salary-vs-distribution split. For pass-through owners the real bill is often lower than shown (QBI, credits); for sole props and partnerships it is often higher once self-employment tax is added. Treat the result as a planning estimate to stress-test, not a guarantee.
This calculator provides estimates for educational and informational purposes only. Results may vary depending on business conditions, accounting methods, taxes, market trends, and other factors. It should not be considered financial, legal, tax, accounting, or investment advice. Consult qualified professionals before making business decisions.
Where this business tax estimator earns its keep
Compare sole prop, LLC, S-Corp, and C-Corp tax outcomes before you form the business.
Get an annual estimate you can divide into rough quarterly payment amounts.
Include an estimated tax line in your profit projections and revenue forecasts.
Estimate how much after-tax income to set aside from profit before year-end.
Estimate income tax on freelance profit, then add self-employment tax with the companion tool.
See the flat 21% C-Corp estimate and weigh it against the double-taxation caveat.
Compare the income-tax-only difference before talking to a CPA about electing S-Corp status.
Run the same profit under different state rates to see how location changes the estimate.
Partners can estimate the tax on their share of partnership profit.
Model how effective tax rate and after-tax income move as profit grows.
Estimate the after-tax income available for loan payments or reinvestment.
See pass-through versus corporate taxation side by side with real numbers.
Re-run every year as income, rates, and your effective tax rate change.
Bring a quick, clear estimate to your tax professional to start the conversation.
What this business tax calculator does well, and where it can't replace a tax professional
Quick-reference comparison of the four entity types this calculator supports
| Entity Type | How It's Taxed | Federal Rate Used Here | Extra Tax Layers to Check | Double Taxation? |
|---|---|---|---|---|
| Sole Prop / Single-Member LLC | Pass-through on the owner's personal return | Your personal effective rate | Self-employment tax on net earnings — see the Self-Employment Tax Calculator | No |
| Partnership / Multi-Member LLC | Pass-through on each partner's personal return | Your personal effective rate | Self-employment tax on each partner's share of profit | No |
| S-Corporation | Pass-through; reasonable salary vs. profit distributions | Your personal effective rate | Payroll (FICA) tax on reasonable salary only, not distributions | No |
| C-Corporation | Separate taxpayer filing its own return | Flat 21% federal corporate rate | Shareholder tax on dividends; payroll tax on employee wages | Yes — dividends are taxed again |
All four entity types use the same state tax line in this calculator, so the difference between them shows up in the federal component. Pass-through entities face self-employment tax that this tool deliberately leaves out — use the Self-Employment Tax Calculator to add it. Sales tax collected on invoices is a separate transaction tax covered by the Business Sales Tax Calculator, not by this income-tax estimate.
Common questions about business entity taxation
Official guidance to complement this calculator — not a substitute for licensed tax advice
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