Business Tax Estimator — California 2026

Estimate your combined federal + California income tax based on your entity type, revenue, and expenses. Compare entity structures side-by-side.

Enter your business financials. Results show total tax liability for the 2026 tax year.

Business Entity Type

Owner Filing Status

Gross Business Revenue

Total Business Expenses

Owner Salary (S Corp only)

Other Household Income

Your Business Tax Estimate

Based on 2026 federal and California tax rates

Gross Revenue

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Net Income

—

Total Tax

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Effective Rate

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Tax Breakdown

Federal Income Tax—

SE / Payroll Tax—

California Income Tax—

CA Franchise Tax—

What This Means for You

Entity Optimization Strategies

Sole Prop → S Corp: If net income exceeds $50K, an S Corp election typically saves $5K-$25K/year in SE tax. California adds a 1.5% franchise tax but the net savings are usually significant.
S Corp Salary Optimization: The right salary-to-distribution ratio is the single biggest lever. Too high eliminates savings; too low triggers IRS audit.
C Corp Considerations: C Corps face double taxation on dividends. Beneficial only in specific circumstances (retained earnings strategy, certain investors, etc.).
Retirement Plans: SEP-IRA, Solo 401(k), or a defined benefit plan can reduce taxable income by $20K-$70K+ per year depending on income level.
California Conformity: California does not conform to all federal deductions. Bonus depreciation, for example, must be added back on your CA return.

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California Business Tax: What You Actually Owe

California has some of the highest combined business tax rates in the United States. When you add federal income tax, self-employment or payroll tax, California income tax, and California franchise tax, the total burden on a profitable small business can exceed 50% of net income — if the business is not structured correctly.

Entity Type Matters More Than Anything Else

The single biggest lever for reducing business taxes in California is entity structure. A sole proprietor earning $200,000 in net income might pay $60,000+ in total taxes. The same income through an optimally structured S Corp might result in $40,000-$45,000 in total taxes — a savings of $15,000-$20,000 per year, every year.

California Franchise Tax

California charges a minimum $800 franchise tax on all LLCs, S Corps, and C Corps — even if the business has no income. S Corps pay 1.5% of net income (minimum $800). C Corps pay 8.84% of net income (minimum $800). LLCs pay a graduated fee based on gross receipts in addition to the $800 minimum.

Frequently Asked Questions

Q: Does California conform to federal bonus depreciation?
A: No. California does not conform to 100% federal bonus depreciation. California allows Section 179 expensing up to $25,000 (vs. $1.16M federal). Any federal bonus depreciation must be added back on your California return and depreciated over the regular schedule.

Q: What is the California LLC gross receipts fee?
A: In addition to the $800 minimum franchise tax, California LLCs pay an annual fee based on gross receipts: $900 for $250K-$499,999; $2,500 for $500K-$999,999; $6,000 for $1M-$4,999,999; $11,790 for $5M+.

Related Resources

More California Tax Calculators

LLC vs S Corp Calculator

See your S Corp tax savings.

Self-Employment Tax

Calculate your SE tax burden.

1031 Exchange Calculator

Calculate your tax deferral.

Property Tax & Prop 13

See your Prop 13 savings.

Capital Gains Calculator

Calculate your gains tax.

Prop 13 Scenario Calculator

Compare hold vs sell vs move.

Want KDA to Run the Exact Numbers for Your Situation?

Calculators give you a starting point. KDA gives you a complete tax strategy — identifying every deduction, optimizing your entity structure, and building a year-round plan to minimize your California tax burden.

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Business Tax Estimator — California 2026