Small Business Tax Calculator
How small businesses are taxed in 2026
Most US small businesses are pass-through entities — sole proprietorships, LLCs, partnerships, and S-corps pay no federal tax themselves; profit flows to the owner's personal return. Owners of sole proprietorships and standard LLCs pay 15.3% self-employment tax on profit (Social Security capped at $184,500 in 2026) plus income tax at their bracket. S-corp owners pay FICA only on their salary. C corporations instead pay a flat 21% corporate rate, with dividends taxed again personally when withdrawn.
The 2026 tax year also locks in the QBI deduction permanently — most pass-through owners deduct 20% of qualified business income before income tax is applied, one of the biggest reliefs available to small business.
2026 numbers this calculator uses
| Item | 2026 figure |
|---|---|
| Self-employment tax | 15.3% (12.4% Social Security + 2.9% Medicare) |
| Social Security wage base | $184,500 |
| Standard deduction | $16,100 single · $32,200 married filing jointly |
| QBI deduction | 20% of qualified business income (phase-outs from $201,775 / $403,500) |
| C-corp rate | 21% flat |
| Income tax brackets | 10% – 37% (2026 inflation-adjusted thresholds) |
Frequently asked questions
What percentage should a small business set aside for taxes?
For most pass-through owners, 25–30% of net profit covers federal self-employment and income tax. Add your state's income tax on top — and remember payments are due quarterly, not just in April.
What expenses can a small business deduct?
Anything ordinary and necessary for the business: software, advertising, contractor payments, rent, supplies, business mileage, insurance, professional fees, a qualifying home office, and health insurance premiums for the self-employed.
Does an LLC pay less tax than a sole proprietorship?
No — a single-member LLC is taxed identically to a sole proprietorship by default. The LLC adds legal protection, not tax savings. Savings come from electing S-corp treatment once profit is high enough.
Is the QBI deduction still available in 2026?
Yes — the 20% qualified business income deduction was made permanent, with limitations phasing in above $201,775 (single) / $403,500 (married) of taxable income.
FincSol Accountancy does bookkeeping, entity-structure advice, and federal & state returns for US small businesses — so you claim every deduction and never guess your tax bill. Dedicated personal accountant. No long-term contract.
Message us on WhatsApp →Federal estimate only — state income/franchise taxes and payroll taxes for employees are excluded; the C-corp figure covers corporate-level tax only. Guidance, not advice. Related: S-corp calculator · quarterly tax calculator · self-employment tax calculator.
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