Business Expense Tax Calculator 2026

Estimate deductions and tax savings for your business structure.

Your Business Expenses

Select your structure and enter spending

Sole Prop Schedule C

LLC Pass-through

S-Corp Pass-through

C-Corp 21% flat

Not sure? Sole Prop is most common for freelancers and small businesses. Single-member LLCs are taxed the same way by default.

Sole Proprietor: Income passes to your personal return. Deductions reduce income taxed at your marginal rate 10-37% plus self-employment tax.

Only enter the expenses you want to estimate. All fields below are optional.

Enter at least one expense amount.

Office Supplies 100%

Software & SaaS 100%

Equipment 100%

Business Travel 100%

Business Meals 50%

Marketing & Ads 100%

Professional Services 100%

Business Insurance 100%

Education & Training 100%

Phone & Internet 100%

Tax Bracket (personal rate)

Include SE tax (15.3%)

Enter your expenses

Fill in spending amounts to see your tax savings instantly.

Estimates only. Uses 2026 federal rates and common deduction rules. Does not include QBI deduction, state taxes, or SE wage base limits. Consult a tax professional for advice specific to your situation.
Rates updated: 2026 tax year

Tax Rates by Structure

Entity	Tax Rate
Sole Prop	10-37% + 15.3% SE
LLC	10-37% + 15.3% SE
S-Corp	10-37% (salary + dist)
C-Corp	21% flat

Pass-through vs C-Corp

Pass-through entities (Sole Prop, LLC, S-Corp) flow business income to your personal tax return. You pay taxes at your individual rate of 10-37%.

C-Corporations pay a flat 21% federal rate. Owners pay additional tax only when taking dividends.

Higher earners may save more with pass-through deductions, while C-Corps benefit from the flat rate when retaining profits for growth.

S-Corp Tax Advantage

S-Corps can reduce self-employment tax by splitting income between salary (subject to payroll tax) and distributions (not subject to SE tax).

Example: $150K profit split as $80K salary + $70K distribution saves roughly $10,700 in SE taxes compared to a sole proprietorship.

Common Deductions

Home office expenses
Business insurance premiums
Professional development
Marketing and advertising
Bank fees and interest
Contractor payments

Tax Rates by Structure (2026)

Entity	Tax Rate
Sole Prop	10-37% + 15.3% SE
LLC	10-37% + 15.3% SE
S-Corp	10-37% (salary + dist)
C-Corp	21% flat

Pass-through vs C-Corp

Pass-through entities (Sole Prop, LLC, S-Corp) flow business income to your personal tax return. You pay taxes at your individual rate of 10-37%.

C-Corporations pay a flat 21% federal rate. Owners pay additional tax only when taking dividends.

Higher earners may save more with pass-through deductions, while C-Corps benefit from the flat rate when retaining profits for growth.

S-Corp Tax Advantage

S-Corps can reduce self-employment tax by splitting income between salary (subject to payroll tax) and distributions (not subject to SE tax).

Example: $150K profit split as $80K salary + $70K distribution saves roughly $10,700 in SE taxes compared to a sole proprietorship.

Self-Employment Tax Explained

Sole props and single-member LLCs pay 15.3% self-employment tax on net earnings (12.4% Social Security + 2.9% Medicare). This is in addition to income tax.

S-Corps avoid SE tax on distributions by requiring owners take a reasonable salary subject to payroll taxes, with remaining profits distributed tax-advantaged.

Frequently Asked Questions

A single-member LLC is taxed like a sole proprietorship by default—all profits are subject to self-employment tax (15.3%). An S-Corp (or LLC electing S-Corp status) can split income between salary (subject to payroll tax) and distributions (not subject to SE tax). For businesses earning over $60-80K in profit, S-Corp election often saves money, but requires payroll administration and reasonable compensation.

C-Corps make sense when: (1) you're retaining profits for growth rather than distributing them, (2) you want to offer equity to employees or investors (VCs typically require C-Corp), (3) you're in a lower tax bracket personally where the 21% corporate rate isn't advantageous, or (4) you want liability protection without S-Corp ownership restrictions. The "double taxation" only matters when you actually take money out.

The IRS requires S-Corp owner-employees to pay themselves a "reasonable" salary for the work they perform before taking distributions. This is typically what you'd pay someone else to do your job—based on industry, location, experience, and hours worked. Paying too little risks IRS reclassification of distributions as wages (plus penalties). A common rule of thumb is 40-60% of profits as salary, but consult a tax professional for your situation.

Yes, the same expenses are deductible regardless of structure—what changes is the tax rate at which deductions save you money. A $10,000 deduction saves $3,700 for someone in the 37% bracket (pass-through) but only $2,100 for a C-Corp (21%). The deduction percentages (100% for supplies, 50% for meals) are consistent across all entity types.

Yes. Startup costs incurred before your business officially begins can be deducted. You can deduct up to $5,000 in startup costs and $5,000 in organizational costs in your first year (phased out if total costs exceed $50,000). Remaining costs are amortized over 15 years. Keep receipts and document that expenses were for your eventual business.

This calculator provides estimates based on 2026 federal tax rates and standard deduction rules. Your actual savings may vary based on state taxes, QBI deduction eligibility, specific expense categories, and other factors. The self-employment tax calculation uses the standard 92.35% adjustment but doesn't account for the Social Security wage base cap. Always consult a tax professional for personalized advice.

Copied!

Business Expense Tax Calculator 2026

Your Business Expenses

Enter your expenses

Tax Rates by Structure

Pass-through vs C-Corp

S-Corp Tax Advantage

Common Deductions

Tax Rates by Structure (2026)

Pass-through vs C-Corp

S-Corp Tax Advantage

Self-Employment Tax Explained

Frequently Asked Questions

Track expenses automatically from receipts