Why does it say my SE Tax is so low even as a sole prop?
I guess I can't upload images but here is what entity iq said. Sorry for the AI slop, I had to use it to get the data from my pictures into text:
Inputs:
Tax Year: 2026 | Business State: California | Wage Base: $183,900 | Business Profit: $100,000 | Reasonable Salary: $50,000 | Admin Costs: $2,500 | Other W-2 Wages: $190,000
Results:
Status: Not Recommended | Net Financial Impact: -$1,050.00 (Additional Cost) | S-Corp is Non-viable
Side-by-Side Comparison:
Sole Proprietor — Business Income: $100,000 | SE Tax: -$2,900 | Total Tax: $2,900
S-Corporation — Salary: $50,000 | FICA Tax: -$1,450 | Admin: -$2,500 | Total Cost: $3,950
How They Calculated Savings:
Self-Employment Tax (Sole Prop): $2,900.00 minus S-Corp FICA Tax: -$1,450.00 minus S-Corp Admin Costs: -$2,500.00 = Net Annual Cost: -$1,050.00
My main question is whether my self employment tax number is correct or not. I thought it was 15.3% but it's way less for me for some reason.
Does this S-corp Analysis look correct?
byu/Swimming_Song7375 intax
Posted by Swimming_Song7375