Incorporation Tax Calculator
Modern turquoise UI • Desktop & Mobile Income & Expenses
Company’s total revenue
Taxable income = Revenue − all allowable expenses
AI Overview
Enter revenue and expenses, choose jurisdiction, and get a clear breakdown of taxable income, corporate tax, surcharges/cess, and total liability. Planning tool only — consult a professional for filing.
Taxable Income
—
Total Tax
—
Effective Rate
—
Step 2 — Jurisdiction & Rates
Enter your state corporate tax rate
Domestic e.g., 22–30; foreign ~40
Surcharge (illustrative): Domestic — 7% if income > ₹1 cr; 12% if > ₹10 cr. Foreign — 2% if > ₹1 cr; 5% if > ₹10 cr.
Results
Taxable Income
—
Revenue − total expenses
Total Tax
—
Base + (surcharge/cess/local)
Effective Rate
—
Total tax ÷ taxable income
| Component | Detail | Amount |
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This tool is for planning only. Tax law changes and special provisions may apply. Always consult a professional for compliance and filing.
People also ask
How do I calculate corporation tax?
Compute taxable income (revenue minus allowable expenses). Apply the corporate tax rate for your jurisdiction. Add surcharges/cess or local taxes. In the U.S., include state corporate income tax. In India, add surcharge by thresholds and 4% cess (if applicable).
What expenses reduce taxable income?
Common deductions: COGS, salaries, rent, depreciation/amortization, R&D expenses, and other allowable business costs per local tax rules.
What is the U.S. federal corporate tax rate?
21% (C‑corporations). Most states also levy corporate income tax (≈ 1%–12%).
How is surcharge/cess applied in India?
Illustrative: Domestic — 7% if taxable income > ₹1 cr; 12% if > ₹10 cr. Foreign — 2% if > ₹1 cr; 5% if > ₹10 cr. Cess (4%) is applied on tax + surcharge. FY‑specific rules may vary.
Free Incorporation Tax Calculator 2025: Step‑by‑Step Guide, Use Cases
If you’re setting up or running a company, you need more than a single tax number—you need a transparent view of what drives it. This guide explains how an incorporation tax calculator works, how to enter the right inputs, and how to interpret outputs like taxable income, base corporate tax, surcharges/cess, state/local taxes, and your effective tax rate. You’ll also see real‑world examples (US and India), tips to avoid common mistakes, and long‑tail keywords you can target if you’re publishing a calculator page.
Choosing an entity changes how you’re taxed and how you pay yourself. Our Custom Corporate Tax Calculator lets you compare LLC (sole prop/partnership), S corporation, and C corporation outcomes—factoring in self‑employment tax vs payroll/FICA, the 20% QBI deduction for pass‑throughs, 21% corporate tax for C‑corps, potential dividend taxes, and calculate federal and state corporate tax 2025 with franchise fees. Below, we explain the math, show worked examples, and share practical tips so you can discuss scenarios with your CPA.
- Taxable income: Revenue minus allowable expenses
- Base corporation tax calculator with state tax: The headline corporate income tax rate for your jurisdiction
- State/local taxes (US) or surcharge/cess (India): Additional components many businesses miss
- Total tax: The sum of all applicable components
- Effective tax rate (ETR): Total tax ÷ taxable income
Who it’s for
- Founders and CFOs modeling year‑end liability or quarterly estimates
- Accountants and finance teams running what‑if scenarios
- Global teams comparing regimes (US vs India vs custom)
- Buyers and investors performing diligence or forecast checks
What the calculator does (and doesn’t)
Models federal outcomes for:
- LLC taxed as sole prop or partnership (pass‑through)
- S corporation (pass‑through with W‑2 salary requirement)
- C corporation (21% federal corporate rate)
Includes:
- Self‑employment tax vs payroll/FICA (employer + employee)
- QBI (qualified business income) deduction for pass‑throughs (subject to limits)
- corporation tax calculator with state tax and potential shareholder dividend tax for C‑corps
- State corporate/pass‑through income tax presets and common franchise fees (where supported)
Optional:
- Owner salary (S/C corp), number of owners, retirement/health adjustments, FUTA/SUTA estimates
- Excludes (typical): Complex credits (R&D), NOL carryforwards, multi‑state apportionment, AMT, detailed phase‑outs. Use it for ballpark comparisons.
How to use the incorporation tax calculator (step‑by‑step)
- Enter revenue and deductible expenses
- Revenue: Total company revenue for your tax year
- Deductible expenses (examples): COGS, salaries, rent/utilities, depreciation/amortization, R&D, other allowable expenses
- Formula:
Taxable income = Revenue − (COGS + Salaries + Rent + Depreciation + R&D + Other deductions)
- Pick your jurisdiction
- US (Federal + State): Federal corporate rate (21% for C‑corps) plus your state corporate rate (commonly 1%–12%). Some calculators optionally treat state tax as deductible from the federal base.
- India (Base + Surcharge + Cess): Base corporate rate (e.g., domestic 22–30%; foreign ≈ 40%), surcharge based on income thresholds, and 4% Health & Education cess on tax + surcharge.
- Custom (Base + Local + Surcharge + Cess): Define your own stack for any country or city.
- Review outputs
- Taxable income
- Base corporate tax
- Additional components (state/local or surcharge/cess)
- Total tax and effective tax rate (ETR)
incorporation tax calculator Formulas (clear and transparent)
Taxable income: TI = Revenue − Allowable Expenses
US (simplified)
- Federal tax = TI × federal_rate
- State tax = TI × state_rate
- Total = Federal + StateUS (optional “state deductible from federal”)
- State tax = TI × state_rate
- Federal tax = (TI − State tax) × federal_rate
- Total = Federal + State
India (illustrative; verify FY specifics)
- Base tax = TI × base_rate
- Surcharge = Base tax × surcharge_rate (threshold‑based)
- Cess = 4% × (Base tax + Surcharge) [if applicable]
- Total = Base tax + Surcharge + Cess
Custom
- Base = TI × base_rate
- Local = TI × local_rate
- Surcharge = (Base + Local) × surcharge_rate
- Cess = (Base + Local + Surcharge) × cess_rate
- Total = Base + Local + Surcharge + Cess
Inputs explained (what to enter and why)
- Net profit (pre‑owner pay for S/C corps): Use profit before any owner salary to model apples‑to‑apples
- Owner salary (S/C corp): Required for S‑corps; choose a “reasonable” number based on role, duties, and market pay
- Number of owners: Splits pass‑through income; affects QBI thresholds and payroll planning
- Filing status: Single/Married affects income thresholds (QBI, Additional Medicare, NIIT)
- State: Adds state income tax and franchise fee assumptions (e.g., CA minimums, TX franchise)
- Health insurance/retirement: Owner health insurance and Solo 401(k)/SEP can change taxable income/QBI
- FUTA/SUTA toggle: Include employer unemployment estimates or set to zero if unknown
- Dividend toggle (C‑corp): Choose whether to distribute residual profits
Worked examples
Example 1 — US C‑corporation with state tax
- Revenue: $1,000,000
- Expenses (COGS + salaries + rent + depreciation + R&D + other): $650,000
- Taxable income (TI): $350,000
- Federal rate: 21%
- State rate: 6%
Case A — No federal deduction for state (simple):
- Federal = $350,000 × 21% = $73,500
- State = $350,000 × 6% = $21,000
- Total = $94,500
- Effective rate = $94,500 ÷ $350,000 ≈ 27.00%
Case B — State deductible from federal:
- State = $350,000 × 6% = $21,000
- Federal base = $350,000 − $21,000 = $329,000
- Federal = $329,000 × 21% = $69,090
- Total = $90,090
- Effective rate = $90,090 ÷ $350,000 ≈ 25.74%
Example 2 — India domestic company
- Revenue: ₹12,00,00,000
- Expenses: ₹9,50,00,000
- Taxable income (TI): ₹2,50,00,000
- Base corporate rate: 25%
- Surcharge thresholds (illustrative): 7% if TI > ₹1 cr; 12% if TI > ₹10 cr; cess 4%Base tax = ₹2,50,00,000 × 25% = ₹62,50,000
Surcharge = ₹62,50,000 × 7% = ₹4,37,500
Cess = 4% × (₹62,50,000 + ₹4,37,500) = ₹2,66,–ish (₹2,675,000 x 4% = ₹1,07,500) — let’s compute precisely:
Base + surcharge = ₹62,50,000 + ₹4,37,500 = ₹66,87,500
Cess = ₹66,87,500 × 4% = ₹2,67,500
Total = ₹62,50,000 + ₹4,37,500 + ₹2,67,500 = ₹69,55,000
Effective rate = ₹69,55,000 ÷ ₹2,50,00,000 ≈ 27.82%
Example 3 — Custom (base 23%, local 3%, surcharge 5% on combined, cess 0%)
- Taxable income: €500,000
- Base tax = €500,000 × 23% = €115,000
- Local tax = €500,000 × 3% = €15,000
- Surcharge = (€115,000 + €15,000) × 5% = €6,500
- Cess = 0
- Total = €136,500
- Effective rate ≈ 27.30%
| Scenario | Profit (pre‑salary) | Salary | SE/Payroll burden (approx) |
|---|---|---|---|
| Sole prop (LLC) | $120,000 | n/a | ~$16,965 SE tax |
| S‑corp | $120,000 | $60,000 | ~$9,180 FICA (empl + emplr) |
| C‑corp | $120,000 | $60,000 | ~$9,180 FICA (+ corp tax and possible dividend tax apply) |
Use cases for an incorporation tax calculator
- Budgeting & forecasting: Quickly test tax outcomes before year‑end or fundraising.
- Jurisdiction planning: Compare US (federal+state) vs India (base+surcharge+cess) vs any custom regime.
- quarterly corporate estimated tax calculator: Model safe‑harbor payments and avoid surprises at filing time.
- Scenario analysis: Toggle the state deductibility option, change base rates, and test surcharges or local levies.
- Due diligence: Investors and acquirers validate EBITDA‑to‑EAT conversions and cash taxes.
Tips to improve accuracy (and avoid pitfalls)
- Track all allowable deductions: Missing R&D, depreciation, or other deductions inflates taxable income.
- Confirm state deductibility rules: Some plans treat state taxes as deductible for federal purposes (your CPA should advise on this for your situation).
- India thresholds change: Surcharge slabs and special provisions vary by financial year; always confirm before filing.
- Apportionment and nexus (US): If you operate in multiple states, your taxable base per state (and apportionment formula) impacts state tax.
- Loss carryforwards: NOLs and credits can materially reduce current‑year liability—factor them in if applicable.
- Fiscal year vs calendar year: Align the custom corporate tax calculator period with your actual tax year and currency.
FAQ/Frequently Asked Questions
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