LLC Tax Calculator

Free small business & LLC tax estimates. Includes both state and federal. Enter your tax profile to discover bonus tax savings.

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This is by far the best business tax calculator I have come across

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Finally a straight forward answer

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Tax Estimate

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Details

  • Net Business Income
  • Social Security
  • Medicare
  • Medicare Added Tax
  • Self Employment Deduction
  • Adjusted Gross Income
  • Franchise Tax
  • Employment Training Tax
  • SDI
  • Family Leave
  • Workers Compensation
  • Workforce Development
  • Temporary Disability
  • Transit Tax
  • Filing Fee
  • Personal Property Rep.
  • LLC/Partner Tax
  • Minimum Tax
  • Minimum Fee
  • Fixed Dollar Minimum
  • Commercial Activity
  • Corp Net Worth Tax
  • Business & Occupation Tax
  • Workforce Training Fund
  • Corporate Excise Tax
  • State Business Tax
  • Economic Development Surcharge
  • Corporation License Tax
  • Business Privilege Tax
  • State Corporate Income Tax
  • Limited Liability Entity Tax
  • Business Entity Tax
  • Modified Business Tax
  • Corporation Occupation Tax
  • Business Income Tax
  • Business Profit Tax
  • Business Enterprise Tax
  • Corporate Net Income
  • Corporation Franchise Tax
  • Corporation Business Tax
  • Annual Report Fee
  • Commerce Tax
  • Corporate Income Tax
  • State Income Tax
  • Standard Deduction
  • QBI Deduction
  • Taxable Income
  • Federal Income Tax
  • Capital Gains Tax
  • Total Tax

References

    Disclaimer: while we hope to provide as accurate results as possible any information here should not be considered tax or financial advice. You should speak with a licensed CPA about your unique situation for a more accurate valuation of your tax obligation and any potential savings.

    How This LLC Tax Calculator Works

    If your company has weathered a few tax seasons you know frustrating and confusing self-employment tax is. This guide will quickly teach you the major mechanics of how your taxes and this tax calculator work, how we calculated your tax rate, and where you can start saving.

    Profitable LLC owners are taxed between 14% and 39% on their self-employment income. This includes both state and federal taxes.

    We’ll discuss the major factors that impact your tax rate, so you’ll be able to start developing your tax strategy. However, first, we need to understand how your sole proprietor or partnership income flows through the tax system on its way to your bank account. We won’t get too technical, just enough detail to equip you with a “bird’s eye view” of how we estimated the total tax for a limited liability company, corporation, or entity.

    LLC Tax = Profits - Social Security - Medicare - State Income Tax - Business Taxes - Federal Income Tax

    Walkthrough of Estimated Tax

    The first thing to know: your business income is considered “earned income” and passes through, from your LLC to your personal taxes. What you need to know about earned income is that it’s exposed to higher tax rates. Pass through simply means your LLC doesn’t affect how much you're taxed, at least not by default (more on this at the end).

    How Does an LLC Get Taxed?

    By default, an LLC is seen as a “disregarded” entity by the IRS. It’s ignored. All company profits pass through to your personal tax situation.

    There’s one simple idea that will put you ahead of nearly all small business owners, in your tax knowledge. Your income is taxed twice. You read that right: you first pay Self-Employment taxes and pay again via income taxes. You might be surprised to learn Self Employment taxes are almost always more important.

    Self Employment Taxes

    Round one of your taxes is made up of Social Security and Medicare or an estimated 15%. Most people fixate on income taxation because of the higher rates, but they are missing the big picture. Because Self-Employment taxes are the first round of taxes they often are the larger amount you pay!

    Take this example:

    Your business earns $100k in revenue and has $50k in business expenses, that’s a $50k profit on your form Schedule C. You’re guaranteed only one deduction here, effectively making your Self-Employment tax 14.13% or $7,065.

    Compare this to income taxation for this person at $5,235 (without deductions taken). That means even though we’ve heavily exaggerated things still they've paid far more into Self-Employment!

    Bottom line: Social Security and Medicare taxes make up the bulk of most LLC's tax liability. To put it simply it’s a smaller percentage, but the pie is much larger. Now let’s learn about our second calculation.

    Income Taxes

    Everything we’ve discussed so far can be thought of as “above the line”, now let’s move below to calculate income liability. To start we calculate this “line” also known as Adjusted Gross Income or AGI.

    We use AGI as a starting point to calculate State and Federal Income tax. To calculate your AGI, take your self employed net income and subtract the total Self-Employment taxes you’ve paid.

    The IRS allows many deductions below the line that help reduce what you pay. This calculator applies the following: standard deduction ($12,400 for 2020 single filers) and Section 199A (commonly called QBI). Be sure to add all your details in the “more accurate” section above to get the most accurate estimate.

    State income expenses have far fewer deductions, however, we’ve taken all that apply to your marital status. Like Federal income taxes, states use your AGI as a starting point.

    Your Effective Tax Rate

    The effective rate you're taxed is the sum of all your taxes you pay on your personal tax return divided by your partnership, sole prop, or corporate income amount. This is a key figure to have when improving your overall tax strategy because it can greatly simplify your decisions. The effective tax rate estimator works because it’s a single amount that’s comparable across income levels, making it ideal to compare potential tax strategies.

    Worst States For LLC Taxes

    There’s generally two kinds of state-level taxes that your LLC profits may be paying: income and business taxes. The following are states that frequently find higher taxes for 1099's or a single member LLC:

    State Income Tax Business
    Oregon 5 - 9.9% -
    Hawaii 1.4 - 11% -
    Alabama 2 - 5% $100 Min
    Arkansas 2 - 6% $150
    Kentucky 5% $175 Min
    Delaware 2.2 - 6.6% $300
    Utah 4.95% -
    Illinois 4.95% -
    Iowa 0.33 - 8.53% -
    Virginia 2 - 5.75% -
    South Carolina 0 - 7% -
    California 1 - 13.3% $800 Min
    Colorado 4.63% -
    Montana 1 - 6.9% -
    Maine 5.8 - 7.15% -
    New York 4 - 8.82% $25 Min
    Idaho 1.13 - 6.93% -
    Massachusetts 5% -
    Georgia 1 - 5.75% -
    Minnesota 5.35 - 9.85% -
    North Carolina 5.25% -
    Kansas 0.5 - 5% -
    Wisconsin 4 - 7.65% -
    West Virginia 3 - 6.5% -
    Nebraska 2.46 - 6.84% -

    Generally states on this list are here due to expensive rates on income. However some states choose to levy business taxes directly on LLCs. Some of these can be particularly burdensome on newer businesses.

    Take California’s LLC tax as an example. Even if your company had zero profits, being an LLC means you’ll have to pay an $800 fee to the California Franchise Tax Board! Coupling this with California’s expensive income liability makes it one of our worst states for LLCs.

    Is an LLC Better for Taxes?

    Unless you’re living in states with a special tax on LLCs (like California and Delaware) then becoming an LLC will not have an impact on your self-employed taxes. That said an LLC opens up new tax strategies (ie S or c corporation) to consider.

    Best States for LLC Taxes

    Contrary to high business tax states, more business-friendly states have low (or zero) income tax and business taxes. The majority of partnerships, sole proprietorship, or a pass-through corporation will find the following states more profitable:

    State Income Tax Business
    Alaska 0% -
    Florida 0% -
    Nevada 0% -
    New Hampshire 0% ⚠️
    South Dakota 0% -
    Tennessee 0% ⚠️
    Texas 0% Min $0
    Wyoming 0% Min $50
    North Dakota 1 - 2.9% -
    Washington 0% Yes

    Note that some states have a “⚠️” icon in the business column. These indicate special taxes that can be unusually expensive if you’ve changed your LLC’s tax classification. However unless you’ve made any changes with an accountant, these likely don’t apply to you.

    Average States for LLC Tax

    The following are states that don’t particularly stand out for their tax incentives towards partnerships, 1099 contractors, and LLCs.

    State Income Tax Business
    Arizona 2.59 - 4.5% -
    Ohio 2.85 - 4.8% Min $0
    Pennsylvania 3.07% -
    Rhode Island 3.75 - 5.99% -
    Indiana 3.23% -
    New Mexico 1.7 - 4.9% -
    New Jersey 1.4 - 10.75%⚠️ $150
    Connecticut 3 - 6.99% $125
    Louisiana 2 - 6% -
    Michigan 4.25% -
    Missouri 1.5 - 5.4% -
    Vermont 3.35 - 8.75%⚠️ $250
    Mississippi 3 - 5% -
    Oklahoma 0.5 - 5% -
    Maryland 2 - 5.75% -

    Please be aware that states with more progressive income rates “⚠️”, can make them poor choices for high business income earners. This table is designed for small business owners with ~$80,000/year in income.

    Updates & Changes

    This calculator supports the years listed below. Additional years will be added as new rules get published so check back often to get your most up to date estimate.

    • Support for the year 2019 added 11/18/2019
    • Support for the year 2020 added 3/8/2020
    • Support for S Corp vs C Corp added 1/20/2021
    • Support for 2021 taxes added 4/2/2021
    • Removed Below Line Self Employment Deduction 5/7/2021

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