Entity comparison (lite)

A structural look at how the same profit is taxed as a sole proprietor, an S-corp, and a C-corp. A starting point — not the full picture.

Simplified structural estimate, for illustration only — not tax advice, and not a recommendation of any entity. Uses 2026 federal brackets and the standard deduction. Sole proprietor = self-employment tax plus income tax. S-corp = payroll tax on salary plus income tax on the pass-through. C-corp = the 21% corporate tax plus tax on dividends (assumed distributed and taxed at 15% qualified-dividend rate — the actual rate is 0/15/20% plus possible 3.8% net investment income tax, and retaining earnings changes the result entirely). This does not model the §199A QBI deduction, California personal income tax, the Additional Medicare Tax, itemized deductions, payroll-tax nuances, or your specific facts — all of which can change the ranking. Entity selection is a significant decision; confirm with a CPA.