Not tax advice. Estimates only — confirm with a CPA before filing Form 2553.
Disclaimer

An educational estimate — not advice.

scorpbreakeven.com helps you understand whether electing S-Corp tax status is likely to pay off. It's a starting point for your own research and a conversation with a professional — not a substitute for one, and not a filing position.

Not professional advice

The information and estimates on this site are provided for general educational purposes only. They are not tax, legal, financial, or accounting advice, are not a substitute for advice from a qualified professional, and don't create any advisory relationship. An S-Corp election, your reasonable salary, and your Form 2553 timing all have real financial and audit consequences — before you act, confirm your situation with a CPA, EA, or tax attorney.

Estimates, not filing positions

The calculator produces a directional estimate, not a tax-return position, an audit-proof salary, or a guarantee of any saving. In particular:

  • Reasonable compensation. There is no single "correct" number. The tool suggests a range from industry data, but the IRS standard (Treas. Reg. §1.162-7, Watson v. Commissioner) is facts-and-circumstances. Setting salary too low to chase savings is the single largest S-Corp audit trigger.
  • Overhead figures. Payroll service, 1120-S prep, registered agent, and state fees are typical midpoint estimates you can override. Your real quotes will differ, and they drive the break-even point.
  • The QBI deduction. The Section 199A interaction — especially the SSTB phaseout and the W-2 wage limit — can flip the answer between the napkin math and the actual return. The tool models the common cases but cannot see every fact.
  • State rules. State LLC fees, franchise taxes, and entity-level S-Corp taxes vary widely and change frequently; multi-state apportionment is out of scope.

Time-sensitive and subject to change

Tax rates, the Social Security wage base, QBI thresholds, and state fees update annually, and the law can change. This tool models rules current to the 2025 tax year. Form 2553 deadlines are strict — generally within 75 days of formation for new entities, or by March 15 for existing entities electing for the current year (late-election relief may apply under Rev. Proc. 2013-30). Verify current figures and deadlines before you rely on them.

Verify before you rely on it

For authoritative rules, consult the IRS Form 2553 instructions, the QBI deduction guidance, and your state's Department of Revenue — and run your specific numbers by a licensed professional. We do our best to keep figures accurate and to cite primary sources, but we make no warranty of accuracy or completeness and accept no liability for decisions made based on this site. See our terms of use.

No affiliation

scorpbreakeven.com is an independent tool operated by Red Goggles LLC. It is not affiliated with, endorsed by, or connected to the IRS, any state taxing authority, or any tax-preparation, payroll, or accounting service.

Last updated: June 1, 2026