Analysis
Company vs. Personal — Real Estate Business
Compare the tax burden of operating as an individual vs. a company for real estate activities.
Lower Tax Option: Individual / Personal
Tax Saving: $6,291 (7.9% of gross profit)
Individual / Personal
Total Tax
$20,621
Effective Rate
25.8%
Net Income
$59,379
Tax Breakdown
Company / Corporate
Total Tax
$26,912
Effective Rate
33.6%
Net Income
$53,088
Tax Breakdown
Tax vs. Net Income Comparison
Individual / Personal — United States
- •Federal income tax: 10–37% progressive (2026 brackets for single filers).
- •Self-employment tax: 15.3% (12.4% SS + 2.9% Medicare) — deduct half as business expense.
- •QBI deduction: 20% of qualified business income deductible for pass-through entities (LLC/S-Corp).
- •State income tax: 0% (FL, TX, NV) to ~13% (CA) — not included in this calculator.
- •S-Corp election: can reduce SE tax by splitting income into salary + distribution.
Company / Corporate — United States
- •C-Corp: 21% flat federal corporate tax rate.
- •Qualified dividends to shareholders: 0/15/20% depending on income bracket.
- •Double taxation: C-Corp pays 21% on profit; shareholder pays 15–20% on dividends.
- •S-Corp / LLC (pass-through): income flows to personal return; avoids double taxation.
- •LLC taxed as sole proprietorship or partnership by default — flexible structure.
- •State corporate taxes: 0% (WY, SD) to ~9.8% (NJ) — not included here.
This calculator provides estimates for comparison purposes only. Tax laws are complex and change frequently. Always consult a qualified tax advisor before making structural decisions.
How It Works
This calculator compares the total tax burden of operating in real estate as an individual vs. through a company. For each scenario, it calculates income tax, social security contributions, and (for companies) dividend tax on distributions to the owner.
Individual
Company
Frequently Asked Questions
At what profit level does a company make sense?
In most countries, it becomes advantageous around €40,000–€50,000 annual profit, where the combined corporate + dividend tax rate falls below the top marginal personal rate. However, fixed accounting costs and legal obligations must be factored in.
What is the distribution rate?
It's the percentage of after-tax company profit paid out to the owner as dividends. The remainder stays in the company (can be reinvested). Lower distribution = lower total tax in the short term.
Does this calculator include social security?
Yes. For individuals, it applies self-employment contributions (varies by country: 21.4% in PT, 15.3% in US, etc.). For companies, the owner-manager pays contributions on salary, not on dividends.
What about the US LLC pass-through?
US LLCs can elect pass-through taxation (no entity-level tax). This calculator models the C-Corp scenario (21% federal). For pass-through, the individual calculation with QBI deduction is more representative.