Calculate Business Tax Liability & Deductions for Small Business

Calculate business tax liability, deductions & corporate tax rates. Plan business expenses, quarterly payments & tax-saving strategies. Essential tool for small business tax management.

Calculate business tax obligations for corporations, LLCs, partnerships, and sole proprietorships. Estimate federal taxes, state taxes, and self-employment obligations for tax planning.

Business Structure Tax Implications

Sole Proprietorship

LLC (Limited Liability Company)

S Corporation

C Corporation

Federal Business Tax Rates (2024)

Entity Type Federal Rate Self-Employment Tax Additional Considerations
Sole Proprietorship Individual rates (10-37%) 15.3% on net earnings Schedule C filing
LLC (default) Individual rates (10-37%) 15.3% on net earnings Form 1065 or Schedule C
S Corporation Individual rates (10-37%) 15.3% on salary only Form 1120S + K-1s
C Corporation 21% flat rate None (corporate entity) Form 1120 + dividend tax

Common Business Deductions

Disclaimer: This calculator provides general estimates for planning purposes. Business tax calculations are complex and vary by situation. Consult a qualified tax professional or CPA for accurate tax planning and compliance advice.

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Frequently Asked Questions

How do different business structures affect my tax liability?

Sole proprietorships and single-member LLCs are pass-through entities taxed on your personal return with self-employment tax on profits. Partnerships and multi-member LLCs split income among owners, each paying individual rates plus SE tax. S-Corps are pass-through but require reasonable salary subject to payroll tax, while distributions avoid SE tax. C-Corps pay 21% corporate tax, then owners pay dividend tax on distributions (double taxation). Entity choice significantly impacts total tax burden, especially for profitable businesses.

What are the advantages and disadvantages of S-Corp taxation?

S-Corp advantages include potential self-employment tax savings on distributions above reasonable salary, pass-through taxation avoiding double tax, and business expense deductions. Disadvantages include required reasonable salary with payroll taxes, restrictions (100 shareholders max, one share class, US shareholders only), and additional compliance costs. The SE tax savings can be substantial but require paying adequate salary. S-Corp election makes sense for profitable businesses where distribution savings exceed additional compliance costs.

How can I minimize business taxes legally?

Maximize legitimate business deductions including office expenses, equipment, professional services, marketing, travel, and employee costs. Time major purchases for tax benefits and consider Section 179 expensing. Contribute to tax-advantaged retirement plans (SEP-IRA, Solo 401k for self-employed). Choose optimal business structure for your situation. Manage income timing across tax years. Keep meticulous records and receipts. Consider hiring family members for legitimate work. Work with qualified tax professionals for complex situations and ensure all strategies have business substance.