Adjust Your Numbers

Move the sliders to see real-time tax calculations based on your income

Annual Business Income
$120,000
Reasonable Salary (S-Corp)
$55,000
Adjust sliders to see how different income levels and salary decisions affect your tax savings
Sole Proprietor
Schedule C Filing
Business Income: $120,000
FEIE Exclusion: -$130,000
Federal Taxable: $0
Federal Income Tax: $0
Self-Employment Tax: $16,956
Total Annual Tax: $16,956
$16,956
S-Corporation
Form 1120-S Election
Salary (FEIE Excluded): $55,000
Profit Distributions: $65,000
Payroll Tax (Both Halves): $8,415
QBI Deduction (20%): -$11,383
Federal Tax on Distributions: $2,494
Total Annual Tax: $10,909
$10,909
$6,047
Annual Tax Savings with S-Corporation
35.7%
Tax Reduction
$30,235
5-Year Total Savings
$504
Extra Per Month
202%
ROI on Compliance

Required IRS Forms Comparison

Click any form to view official IRS instructions

Sole Proprietor Forms

  • Form 1040
    Individual Tax Return
    Due: April 15
  • Schedule C
    Business Income & Expenses
    Filed with 1040
  • Schedule SE
    Self-Employment Tax
    Filed with 1040
  • Form 2555
    Foreign Earned Income Exclusion
    Filed with 1040
  • Form 114 (FBAR)
    Foreign Bank Accounts (if >$10K)
    Due: April 15

S-Corporation Forms

  • Form 1120-S
    S-Corporation Tax Return
    Due: March 15
  • Form 941
    Quarterly Payroll Tax Return
    Due: Quarterly
  • Form 940
    Annual Unemployment Tax
    Due: January 31
  • Schedule K-1
    Shareholder Income Statement
    Issued by S-Corp
  • Form W-2
    Employee Wage Statement
    Issued by S-Corp
  • Form 1040 + 2555
    Individual Return + FEIE
    Due: April 15

Salary Optimization Strategy

Click on salary options to see how different approaches affect your tax savings and audit risk

Choose Your Strategy

The IRS requires S-Corp shareholders to pay themselves a "reasonable salary" before taking distributions. The lower the salary, the more you save on payroll taxes - but too low increases audit risk.

Aggressive
$6,810 savings
Higher audit risk, maximum savings
Balanced
$6,047 savings
Good balance of savings & defensibility
RECOMMENDED
Conservative
$4,898 savings
Lower audit risk, reduced savings
Important Disclaimer: This calculator provides estimates for planning purposes only. Actual tax savings depend on your specific situation including state taxes, foreign tax credits, retirement contributions, filing status, and other factors. Results assume FEIE qualification through Physical Presence Test and standard deduction. Consult qualified tax professionals for personalized advice.

2026 Tax Year: Calculations use 2026 FEIE limit ($130,000), standard deduction ($15,000 single), and current SE tax rates (15.3%). Tax laws may change.