Should Northline Studio elect S-corp?

Northline Studio’s 2026 profit, worked out two ways

Send to your accountant

At a $33,518.98 salary, electing would save about

$948.69a year

After $1,400.00 of payroll and filing costs. Above a $39,110.77 salary, it costs more than it saves.

What electing saves at each salaryEstimate · drag to try a salary

Electing savesElecting costs moreBreak-even$39,110.77 salary+$10k$0−$10k

$0$20k$40k

Salary you’d pay yourselfStarts at 60% of profit, a common starting point, not a rule.

The two paths, line by line

Same $55,864.97 profit

Staying as you are against electing S-corp, line by line
Line	Stay as you are	Elect S-corp	Difference
Salary through payroll	—	$33,518.98
Distribution to you	—	$18,381.79
Self-employment or payroll tax	$7,893.47	$5,128.40	−$2,765.07
Federal income tax	$3,190.55	$3,606.93	+$416.38
State income tax	$0.00	$0.00	State not set
Payroll service, extra return, state fee	—	$1,400.00	+$1,400.00
Total tax and costs	$11,084.02	$10,135.33	−$948.69

Costs we assumed

Yours to change

Payroll serviceRunning payroll for one person, per year.Extra tax returnPreparing Form 1120-S, per year.State entity feeNot modelled for your state. Enter one if it applies.

What this leaves out

Ask about these too

The 2% shareholder health insurance treatment for a working S-corp owner.
How a retirement plan interacts with a lower W-2 wage base.
State payroll taxes and unemployment insurance on the salary.
The Social Security benefit effect of taking a lower wage now.
The 0.9% additional Medicare tax above $200,000 of wages, on either path.

An estimate, not advice to elect. An S-corp brings payroll, a separate return and a reasonable-salary duty, and this page can’t judge any of them for you. Talk to an accountant before filing Form 2553.

Decided to elect?

Contha fills Form 2553 and New York’s CT-6, works out the deadline, and hands the business to payroll once it is sent. A sole proprietor starts an LLC or corporation first, here too.

Start the election

Should Northline Studio elect S-corp?

Northline Studio’s 2026 profit, worked out two ways

Send to your accountant

At a $33,518.98 salary, electing would save about

$948.69a year

After $1,400.00 of payroll and filing costs. Above a $39,110.77 salary, it costs more than it saves.

What electing saves at each salaryEstimate · drag to try a salary

Electing savesElecting costs moreBreak-even$39,110.77 salary+$10k$0−$10k

$0$20k$40k

Salary you’d pay yourselfStarts at 60% of profit, a common starting point, not a rule.

The two paths, line by line

Same $55,864.97 profit

Staying as you are against electing S-corp, line by line
Line	Stay as you are	Elect S-corp	Difference
Salary through payroll	—	$33,518.98
Distribution to you	—	$18,381.79
Self-employment or payroll tax	$7,893.47	$5,128.40	−$2,765.07
Federal income tax	$3,190.55	$3,606.93	+$416.38
State income tax	$0.00	$0.00	State not set
Payroll service, extra return, state fee	—	$1,400.00	+$1,400.00
Total tax and costs	$11,084.02	$10,135.33	−$948.69

Costs we assumed

Yours to change

Payroll serviceRunning payroll for one person, per year.Extra tax returnPreparing Form 1120-S, per year.State entity feeNot modelled for your state. Enter one if it applies.

What this leaves out

Ask about these too

The 2% shareholder health insurance treatment for a working S-corp owner.
How a retirement plan interacts with a lower W-2 wage base.
State payroll taxes and unemployment insurance on the salary.
The Social Security benefit effect of taking a lower wage now.
The 0.9% additional Medicare tax above $200,000 of wages, on either path.

Decided to elect?

Contha fills Form 2553 and New York’s CT-6, works out the deadline, and hands the business to payroll once it is sent. A sole proprietor starts an LLC or corporation first, here too.

Start the election