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Form 2553 Calculator

When to file Form 2553, who can elect S corp status, and how much payroll tax an S corp salary could save versus self-employment tax.

Updated November 4, 2026. Free, no sign-up; everything runs in your browser and nothing you type is stored.

Form 2553 S corp tax savings calculator

Business net profit before owner salary ($)Reasonable salary you'd pay yourself ($)Extra yearly costs: payroll, 1120-S prep, state fees ($)Year the S election should start

Estimated yearly payroll tax saving

–

–Self-employment tax as a sole proprietor or LLC

–Payroll tax on your salary (both halves)

–Profit taken without payroll tax

–Form 2553 deadline (calendar year)

What Form 2553 does

Form 2553, Election by a Small Business Corporation, tells the IRS an eligible corporation or LLC wants to be taxed as an S corporation. The company then files Form 1120-S each year, and profit passes through to the owners on Schedule K-1. To qualify the business generally needs 100 or fewer shareholders, only allowable shareholders (individuals, certain trusts and estates, no nonresident aliens) and one class of stock.

The Form 2553 deadline

File no more than 2 months and 15 days after the start of the tax year the election should take effect, or at any time in the year before. For a calendar-year company that's March 15, 2027 for 2027. A late election can often still be accepted under Rev. Proc. 2013-30 if you had reasonable cause and file within 3 years and 75 days of the intended date.

Where the tax saving comes from

As a sole proprietor or single-member LLC you pay 15.3% self-employment tax on 92.35% of all profit (12.4% Social Security up to the $184,500 wage base for 2026, plus 2.9% Medicare). As an S corporation you pay yourself a reasonable salary with payroll tax, and the rest of the profit comes out as distributions without Social Security and Medicare tax. The IRS can recharacterize distributions as wages if the salary is unreasonably low, so base it on what the work would cost to hire.

Worked example

A business earning $100,000 pays $14,130 of self-employment tax. As an S corp with a $50,000 salary, payroll tax is $7,650, a difference of $6,480 before extra costs. After about $2,000 for payroll and a separate return, the net saving is around $4,480. Income tax still applies to all the profit either way; the S corp salary also changes your QBI deduction and retirement contribution limits, so compare with the self-employment tax estimator and solo 401(k) before electing.

Common questions

When is Form 2553 due?

Within 2 months and 15 days after the tax year starts: March 15, 2027 for a calendar-year 2027 election.

Can you file Form 2553 late?

Often yes, under Rev. Proc. 2013-30 within 3 years and 75 days, with reasonable cause.

How does an S corp save tax?

Payroll tax applies only to a reasonable salary, not to distributions of the remaining profit.

Which return does an S corp file?

Form 1120-S, with a Schedule K-1 for each owner.

Sources

More paycheck and tax calculators: Form 2290 Calculator · Form 2441 Calculator · Form 4797 Calculator · Form 4868 Calculator

General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.