Methodology (United States)

Filing status & family assumptions

Unless stated otherwise, we assume single filing status, no dependents, no additional schedules (interest, capital gains, rental). Married filing jointly uses different standard deductions and brackets — not activated here.

Self-employment tax

We multiply net profit by 92.35% to obtain the statutory self-employment income base, then apply Social Security (12.4%) up to the annual wage base and Medicare (2.9%) without modeling the Additional Medicare Tax threshold. Cross-check the wage base each fall on IRS Newsroom.

Federal income tax

Ordinary brackets are applied to taxable income after the standard deduction, half of self-employment tax (deductible portion), and an optional flat 20% QBI deduction. No alternative minimum tax, no net investment income tax, no credits (child tax credit, EITC, etc.).

S-Corp reasonable compensation

You supply the cash salary; we enforce a $40,000 floor when profits allow, reflecting audit risk discussions in IRS Fact Sheets — this is not a safe-harbor. Payroll deposit rules and Form 941 compliance are omitted.

State & local taxes

By default state tax is zero. The slider is a blended rate on net profit to illustrate cash impact, not apportioned corporate tax, gross receipts tax, or NYC/SF local surcharges.

Quality assurance

Before each tax season we reconcile headline numbers against IRS Revenue Procedures and the cumulative inflation adjustments published for brackets and standard deductions. Residual differences are documented inline with // À vérifier comments in source.