SOLE PROPRIETOR
BUSINESS OWNER PLANNING
Tax liability calculator
Explore how income, deductions, and owner compensation change your estimated taxes.
Your scenario
State estimates exclude credits, local tax, business/entity tax, state payroll tax and federal effects of paying state taxes. Reviewed tax entries should include any additional state/local taxes you want compared.
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Before the bonus. Enter compensation appropriate for the owner's work; $50,000 is an example.
Qualified business income deduction
QBI is not calculated automatically. Enter a separately verified deduction for each scenario; wages do not qualify. Leave at zero to compare taxes before QBI.
Planning estimate · Before credits and AMT · QBI excluded
S-CORP OWNER
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Federal + selected state + both payroll sidesEstimated difference
—Follow the dollars
| Annual amounts | Sole proprietor | S-Corp owner |
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How the brackets apply
Each rate applies only to income inside that bracket.
| Taxable income band | Rate | Your income in band | Income tax |
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What this estimate includes
State coverage: All 50 states and DC can be selected. Bracket estimates use federal AGI before state deductions unless you enter reviewed state taxable income. Arkansas, Connecticut, New York and Ohio require reviewed tax entries because special calculations are not modeled. Taxable states also require reviewed tax entries for head-of-household and separate filers. California, Idaho, North Dakota and Vermont use provisional prior-year thresholds. State estimates are not complete state returns.
High-income scenarios: Inputs support $50 million of ordinary active business income. AMT, investment income, capital gains and automatic QBI calculations are excluded, so this is not a complete high-net-worth tax projection.
State schedule reference: 2026 state rate compilation. Updates: Georgia · South Carolina · Utah · Massachusetts · West Virginia.
One active business, one working owner, ordinary business income, the basic standard deduction, Social Security, Medicare, and Additional Medicare tax. “Income” means business profit before the deductions and owner compensation entered here—not sales revenue. Enter only eligible deductions not already subtracted. The same business deductions apply to both structures.
The owner bonus is taxable W-2 compensation in the S-Corp scenario. A sole proprietor cannot deduct a payment to themselves, so the bonus does not change that scenario. The S-Corp total includes employer payroll tax as a business cost, as well as the owner's personal taxes. It is not a Form 1040 balance due. Taxes already paid or withheld are not subtracted.
No automatic state deductions, credits, alternative minimum tax (AMT), unemployment taxes, other household income, investment income, retirement contributions, age-related deductions, loss carryovers, or S-Corp administration costs are modeled. QBI deductions require a separate eligibility and limitation calculation. Results are planning estimates, not a completed tax return. If salary, bonus, and employer payroll taxes exceed profit, the S-Corp result is marked as unfunded instead of assuming deductible losses.
2026 sources: IRS brackets & deductions · Social Security wage base · Self-employment tax · Additional Medicare · QBI rules · Owner compensation