Calculator

Business Structure Tax Calculator

See how the same business profit ends up taxed differently as a pass-through entity versus a C-corporation, retained or distributed.

← Read the Business & Startup Taxation concept page

Business profit

Owner's personal tax rate (pass-through)

Corporate tax rate

Dividend tax rate (on distributed profit)

C-corp, fully distributed — combined effective rate

32.85%

Pass-through (after tax)

$68,000.00

C-corp, retained (after tax so far)

$79,000.00

C-corp, distributed (after tax)

$67,150.00

How the math works

Pass-through:               $100,000.00 × (1 − 32%) = $68,000.00

C-corp, retained:           $100,000.00 × (1 − 21%) = $79,000.00
                             (second layer of tax deferred until distributed)

C-corp, fully distributed:  $100,000.00 × (1 − 21%) × (1 − 15%) = $67,150.00
                             (combined effective rate: 32.85%)

The "C-corp, retained" figure isn't tax-free — it's the same profit taxed once so far, with the second layer deferred rather than eliminated. Whether double taxation ends up costing more than pass-through treatment depends entirely on how these three rates compare, and on how long distribution is delayed.