This tool walks you through the same information your accountant would ask for when preparing a business tax return: your entity type, your income, your cost of goods sold, your deductible expenses, and any special deductions you qualify for. As you enter numbers, the sidebar updates a live estimate of your federal self-employment tax, federal income tax, and Virginia state income tax, so you can see in real time how decisions like claiming the Section 179 deduction or the Qualified Business Income (QBI) deduction affect what you owe.
At the end of the wizard, the tool generates a planning copy of the actual federal form your entity type would file (Schedule C, Form 1065, Form 1120-S, or Form 1120) along with the matching Virginia form (Form 760, 502, or 500), populated with the figures you entered. These are formatted to closely resemble the official forms so you can review your numbers in context, but they are planning documents only and are not a substitute for filing through the IRS, the Virginia Department of Taxation, or a licensed tax professional.
By default, this is the simplest path: business income flows directly onto your personal return via Schedule C, and net profit is subject to both self-employment (SE) tax and ordinary federal income tax. SE tax covers the Social Security and Medicare contributions that an employer would normally split with you, which is why it often comes as a surprise to people who are newly self-employed: it is calculated on top of, not instead of, regular income tax.
These file an informational return (Form 1065) and pass income through to each owner's personal return via a Schedule K-1. The entity itself generally does not pay federal income tax, but each partner's share of the income is still subject to SE tax in most cases, similar to a sole proprietor.
An S Corporation is also a pass-through entity for federal tax purposes, but owner-employees typically pay themselves a "reasonable salary" subject to payroll taxes, while remaining profit can be distributed without SE tax. This structure is one of the more common reasons growing sole proprietorships convert to an S Corp, though it adds payroll administration and stricter compliance requirements that this calculator does not model in detail.
A C Corporation is a separate taxpayer: the corporation pays a flat 21% federal corporate income tax on its profits, and any dividends paid out to owners are taxed again on the owner's personal return, a pattern often called "double taxation." For Virginia, C Corporations pay a flat 6% state corporate income tax with a $250 minimum, regardless of profit, which is why this calculator always shows at least $250 owed to Virginia for C Corporations with positive Virginia taxable income.
Normally, the cost of equipment, vehicles, or software used in your business is deducted gradually over several years through depreciation. Section 179 allows many businesses to instead deduct the full cost of qualifying purchases in the year they are placed in service, up to an annual limit. This can significantly reduce taxable income in the year of a large purchase, but it also means there is less depreciation left to deduct in future years, so the total tax saved over time is generally the same; Section 179 mainly changes when the deduction is taken.
Many owners of pass-through businesses (sole proprietorships, partnerships, LLCs, and S Corporations) can deduct up to 20% of their qualified business income before calculating federal income tax. This calculator applies a simplified version of that 20% deduction when the QBI option is selected. In practice, the real QBI deduction has additional limits based on total taxable income, the type of trade or business, and W-2 wages paid, particularly for "specified service trades or businesses" such as consulting, law, accounting, and health services above certain income thresholds. If your income is near these thresholds, the actual deduction you qualify for may differ from this simplified estimate.
Business meals are generally only 50% deductible, which is why this calculator automatically applies that 50% factor to whatever amount you enter for meals, separate from travel costs (such as airfare and lodging), which are typically 100% deductible.
This depends on the entity type you select in Step 1. Sole proprietors and single-member LLCs generally file Schedule C with their personal Form 1040. Multi-member LLCs and partnerships file Form 1065. S Corporations file Form 1120-S. C Corporations file Form 1120. This calculator generates a planning version of the matching form, along with the corresponding Virginia form, automatically based on your selection.
Self-employment tax replaces the Social Security and Medicare taxes that would normally be split between an employee and an employer. As a self-employed business owner, you are responsible for both halves, which is why SE tax is calculated separately from, and in addition to, your regular federal income tax on the same profit.
These two deductions address different things and can often both apply. Section 179 lets you deduct the cost of qualifying equipment or property purchases immediately rather than over several years. The QBI deduction is a separate deduction based on your overall qualified business income, regardless of whether you purchased equipment. This calculator allows you to enter a Section 179 amount and separately choose whether to apply the QBI deduction, so you can compare scenarios with each turned on or off.
Virginia uses its own tax brackets (2% to 5.75% for individuals and pass-through owners, or a flat 6% with a $250 minimum for C Corporations) and its own standard deduction and exemption amounts, which are generally lower than the federal standard deduction. Virginia taxable income in this calculator starts from a simplified version of your federal adjusted gross income and applies Virginia's own deductions, which is why the two totals will not match.
No. The forms generated by this tool are formatted to resemble the official IRS and Virginia forms for planning and review purposes only. They are not official, IRS-approved e-file or paper forms, and they should not be submitted as a substitute for properly filed returns. Use them to review your numbers and discuss your situation with a licensed CPA or enrolled agent before filing.
No. All calculations happen directly in your browser. Nothing you enter, including business names, EINs, Social Security Numbers, or financial figures, is saved, transmitted, or stored on our servers. If you refresh or close this page, your entries will be lost unless you have downloaded the .txt summary or printed your forms.
Tax Disclaimer: TaxFlow Pro is a planning and educational tool only and does not constitute tax, legal, or accounting advice. Federal and Virginia tax calculations shown here are simplified estimates based on general 2025 tax brackets, standard deductions, and a simplified Qualified Business Income deduction, and do not account for every credit, deduction, phase-out, prior- year carryover, or special circumstance that may apply to your specific situation. Tax laws change frequently and may be applied differently by the IRS and the Virginia Department of Taxation. Always consult a licensed CPA, enrolled agent, or tax attorney, and verify all figures using official IRS and Virginia Department of Taxation resources, before filing any tax return.