How do state corporate taxes factor into C Corp?

Use the state corporate tax rate input to include your state’s C Corp tax. The C Corporation column summarizes the combined corporate layer.

Does NIIT (3.8%) apply here?

For C Corps, you can toggle applying NIIT 3.8% on dividends. The planner excludes NIIT on pass-through by design.

What do I get in the download?

A PDF and spreadsheet of the full Entity Matrix: assumptions, scenario pros/cons, a reasonable-compensation checklist, and advisor notes.

Free Calculator

Entity Structure Matrix for $1M–$10M

Name: How to Structure Your $1M+ Business (and Stop Losing Six Figures in Taxes)
Uploaded: 2025-10-17T00:00:00Z
Duration: 3 min 57 s
Description: If your business is past $1M in revenue, your entity structure could be costing you $50K–$100K+ every year. Learn when to upgrade to an S Corp or C Corp and how to fix it.

Compare S Corp, C Corp, and Partnership using an apples‑to‑apples model of payroll/SE layers, corporate tax, and shareholder dividends. Use this to frame your strategy session.

Sole Prop / Partnership

$31,606

S Corporation

$13,770

C Corporation

$77,541

Business

Annual profit (before owner W‑2)

Owner W‑2 (reasonable comp)

Filing statusOwner W‑2 wages from other employers

Owner outside wages reduce the owner’s remaining Social Security base and Additional Medicare threshold. Spouse wages affect only the MFJ Additional Medicare threshold.

Thresholds

OASDI wage base (editable, 2026 figure)

Additional Medicare threshold: $200,000

Owner’s remaining OASDI base: $184,500

Prefilled with the 2026 wage base published by the Social Security Administration. Edit it to model a different year.

C Corp assumptions

State corporate tax rate

Planner range: 0% to 20%.% of after-tax profits distributed

Dividend tax rate

Qualified dividends: typically 0, 15, or 20Apply NIIT 3.8% on dividends

Sole Prop / Partnership

SE earnings (92.35% of profit): $277,050

OASDI (12.4%, capped)$22,878

Medicare (2.9%, uncapped)$8,034

Additional Medicare (0.9%)$693

Total considered

$31,606

S Corporation

Employer FICA$6,885

Employee FICA + Addl Med$6,885

Employee Additional Medicare uses the remaining threshold after the owner’s outside wages and, for MFJ, spouse wages. Employer Social Security remains based on this employer’s payroll.

Total considered

$13,770

C Corporation

Corp tax (21% + state)$42,654

W-2 FICA (combined)$13,770

Shareholder tax on dividends$21,117

Total considered

$77,541

S Corp vs. Sole Prop

$17,836

Payroll/SE angle only; excludes income tax & §199A.

C Corp vs. Sole Prop

-$45,935

Includes corp tax + FICA + dividends under your assumptions.

Get the full matrix (PDF + spreadsheet)

Includes assumptions, pros/cons by scenario, and a documentation checklist for S Corp reasonable compensation.

Quick notes

Only OASDI is capped at the wage base; Medicare is uncapped.
Additional Medicare (0.9%) applied using the owner’s outside wages and, only for MFJ, spouse wages.
Planner excludes full individual income tax, §199A/QBI limits, NIIT on pass‑through, FUTA/SUTA, and local payroll taxes.

Common questions

Short answers based on how the planner actually models payroll layers, NIIT, and state corporate tax.

OASDI (12.4% split employer/employee) is capped at the wage base you enter (prefilled with the 2026 figure of $184,500). Only wages are subject to OASDI; it doesn’t apply to S Corp distributions or C Corp dividends.

The 0.9% Additional Medicare applies to wages above the remaining threshold after the owner’s outside W-2 wages and, for MFJ, spouse W-2 wages. The modeled thresholds are $200,000 for Single, $250,000 for MFJ, and $125,000 for MFS.

Generally no. Owner-employees must take reasonable W-2 compensation (subject to payroll taxes). Distributions above reasonable comp are typically not subject to SE tax.

Use the state corporate tax rate input to include your state’s C Corp tax. The card summarizes the combined corporate layer in the C Corporation column.

For C Corps, you can toggle “Apply NIIT 3.8% on dividends.” The planner excludes NIIT on pass-through by design (see notes).

The quick planner excludes full individual income tax, 199A/QBI limits, NIIT on pass-through, FUTA/SUTA, and local payroll taxes (see the quick notes next to the download form).

A PDF and spreadsheet of the full Entity Matrix: assumptions, pros/cons by scenario, a reasonable-compensation checklist, and advisor notes.

Yes. The calculator and downloadable materials are free.

The “$1M+ Structure” Quick Take

If your business is past $1M in revenue, your entity structure could be costing you $50K–$100K+ every year. Learn when to upgrade to an S Corp or C Corp and how to fix it.

Read the full blog post

How this was prepared

Prepared from primary sources

Educational tax content prepared by HavenStone Advisory, a CPA-led firm, and grounded in the primary sources listed here. It is not individualized tax, legal, accounting, investment, or financial advice. Rules can change, and your facts matter, so confirm decisions with your CPA, attorney, or tax advisor before acting.

Prepared by HavenStone Advisory

See our editorial policy or report a correction.

Primary references

Review standard

Primary-source references checked where rule-specific claims are made.
Article scope limited to educational information unless a client engagement exists.
Time-sensitive tax rules labeled with published, updated, or reviewed dates.

Continue planning

How to Structure a $1M+ Business

Read the companion article on entity choice, owner pay, and common structure mistakes.

Tax Playbook Estimator

Map entity decisions into quarterly estimates, owner pay, and deadline planning.

Business Tax Strategy

Validate entity changes with CPA-led planning before making elections.

Take Action

Turn your entity model into a tax plan

Bring your numbers and get a focused, CPA-led session to choose S Corp vs C Corp vs LLC, set a defensible owner salary, align payroll/SE tax and dividends, and leave with a clear 12-month implementation checklist.