Professional services
LLC Tax Calculator
Tax on a single-member LLC, which by default is taxed as a sole proprietorship.
Result
Not tax advice. Entity choice, reasonable compensation, pass-through deductions and state treatment interact in ways that depend entirely on your circumstances, and the rules change annually. This estimates a set-aside; the decision belongs with an accountant. The pass-through deduction has income thresholds and excludes several service businesses above them, so claiming the full 20% is frequently wrong. This also applies a flat marginal rate rather than progressive brackets, which overstates the tax.
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About this calculator
Does forming an LLC reduce my tax?
By itself, no. A single-member LLC is disregarded for federal tax by default and taxed exactly as a sole proprietorship. It provides liability separation, not a tax reduction.
When does an LLC save tax?
When it elects S corporation treatment and the owner takes a reasonable salary with the remainder as a distribution, which can reduce self-employment tax. Whether that helps depends on profit level and the added cost of running payroll.
The formula
net profit, then self-employment tax, then income tax on profit less half the SE tax, the standard deduction and any pass-through deduction
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