About
A calculator that will tell you not to bother
Most S-corp calculators exist to sell you an S-corp. This one exists to tell you whether you should have one, which means it says no fairly often.
Why this exists
The standard S-corp calculator multiplies your profit by 15.3%, subtracts a guess at payroll costs, and shows you a large number. That calculation is wrong in three ways that matter, and the errors all point the same direction — toward electing.
It ignores that W-2 wages are not qualified business income, so shifting profit into salary shrinks your §199A deduction. It ignores that above roughly $202,000 of taxable income the deduction is capped at 50% of W-2 wages, which means a sole proprietor paying no wages can lose it entirely. And it ignores that California charges S corporations 1.5% of net income, that Illinois adds a replacement tax, and that Tennessee, New Hampshire, Washington D.C. and New York City decline to recognise the federal election at all.
In New York City those omissions move the break-even point from about $40,000 of profit to about $133,000. That is not a rounding error. That is the difference between a good decision and an expensive one that locks you in for five years.
Who builds it
Electa is built and maintained by Nick Burton. It is a small, independent project rather than a firm, and it is deliberately narrow: one decision, modelled properly, for US solo business owners.
I am not a CPA, an enrolled agent or a tax attorney, and I do not pretend to be. What this site offers is arithmetic that is shown rather than asserted — every rule, rate and deliberate omission is documented on the methodology page, including the things the calculator does not model. If you find an error, I want to hear about it.
How it makes money, in plain terms
The calculator is free and there are no accounts, no email gates and no advertising. When the tool concludes that electing makes sense, it links to payroll and formation services, and some of those links pay a commission if you sign up. That is the entire business model.
Two commitments follow from that, and they are load-bearing:
- A commission never changes a number. Every figure is computed from your inputs by the same code, regardless of what any partner pays.
- A commission never changes the recommendation. When the arithmetic says do not elect, the page says do not elect — and shows bookkeeping and tax-prep links instead of payroll ones, because a payroll service is worthless to someone who should not be running payroll.
This is not altruism. A calculator that people suspect of steering them is worth nothing, and the only durable version of this business is one where the advice is correct even when the correct advice earns less.
What it deliberately does not do
- It does not know your facts, and it is not a substitute for a professional.
- It does not model credits, the alternative minimum tax, multi-state apportionment, pass-through entity tax elections, or most local income taxes.
- It will not recommend a salary below 30% of profit, because the arithmetically optimal answer is often zero and that answer would get you audited.
Contact
Corrections, questions and partnership enquiries all go to the same place, and I read them.
If you are reporting a calculation error, a link to the scenario is the fastest way to show me — the Copy shareable link button on the calculator encodes every input.