{
  "tool_id": "art-713-scorp-election-break-even",
  "tool_version": "1.0.0",
  "display_name": "S-Corp Election Break-Even Modeler",
  "mcp_name": "model_scorp_break_even",
  "mandate_type": "readiness_diagnostic",
  "wave": 123,
  "gpu": false,
  "url": "https://ainumbers.co/chaingraph/art-713-scorp-election-break-even.html",
  "description": "S-Corp election break-even modeler: from net self-employment income, a reasonable W-2 salary share and an annual admin cost, compute the sole-proprietor SE tax, the S-Corp payroll tax, the SE-tax saving net of admin cost, the five-year saving, and the 500-step-grid break-even income at which electing starts to pay, plus a QBI section 199A trade-off output weighing payroll-tax saved against the 20% deduction value lost on wages paid at the adjudicated 19.8% effective rate, with income-threshold and SSTB caveats as flags. 2026 figures: SS wage base $184,500 with cap logic on both sides (SS legs cap at the base, Medicare 2.9% continues uncapped) and the 92.35% SE factor applied to net earnings from self-employment only, never to W-2 wages (IRS Topic 554). That D4 treatment is the adjudication of record for this port (Tim, 2026-10-06): Apex #111 applies the factor to the wage and carries the error, so the S-Corp-side outputs intentionally differ from the source by the documented amount while the sole-prop side is source-identical. Filing status and the owner health premium are accepted and echoed but excluded from the tax arithmetic (source DIFFERS D1/D2, preserved); the 0.9% Additional Medicare Tax stays a stated caveat, not a modeled term. Admin cost carries a ~$1,500–$3,000/yr guidance band: values outside it are honored, never clamped, and flagged. Ported from ApexLogics display_number #111 (AL-118), CC BY 4.0, per the APEX-PORT fleet plan (payload APEXPORT-SC111, GRADES 8fb2772d).",
  "input_schema_ref": "chaingraph/art-713-scorp-election-break-even.html#manifest",
  "consumes": [],
  "feeds": [],
  "status": "live",
  "conformance_fixtures": true,
  "compute_capability": "server",
  "compute_images": [{"system":"sha256-source","image_id":"sha256:7e1af77a80f8ba34c85d5ad070e0625aea5118c66bb72f50380f9413001b07f8","valid_from":"2026-10-06"},{"system":"risc0","image_id":"sha256:a1a0bc89b5b1febaeda3519f6dbade0fa5ac16beeb143c4e1b01689573567bc6","valid_from":"2026-10-16"}],
  "export_capability": ["json"],
  "standards_basis": "not_applicable",
  "cited_clause_digest": [],
  "compute_proof_ready": "ready",
  "compute_proof": {
    "type": "ZkVmReceipt",
    "system": "risc0",
    "receiptFormat": "groth16-bn254",
    "imageId": "sha256:a1a0bc89b5b1febaeda3519f6dbade0fa5ac16beeb143c4e1b01689573567bc6",
    "seal": "EX2e6aoFpWC11ZDf/fQlBRcBPaTm9VU/OjxyqRfFFDUtgSvYNIRR8HIfsj5HIQm/TMpim4Fz5D6/rgy4/tI9Iw2JGH03hLhaVzpqwc4s/F51v3eEDBk2dAcEYJrjbSf9D6X3U2JWd1yix2Ro06JO8qNIujb1z2ha7YOMGqj9twIPZBDGCWttFw6X1KTY/V10bzARiv1L2RYRbDSyK9ZLNCSKrizWDsRw6ElvFzMyfpJQykcX/Elwq59i063DMdKWAkLyYcyP7ixl3/uq7BtKTr9+wbTf+dh0vp39eHCM3aQM//X5s3XZghdOMdrkD4QVqcTEw5o0WKIKRJ+c6IDkMA==",
    "journal": {
      "chaingraph_version": "0.4.0",
      "kernel_digest": "sha256:7e1af77a80f8ba34c85d5ad070e0625aea5118c66bb72f50380f9413001b07f8",
      "output": {
        "annual_admin_cost": 3000,
        "break_even_income": 46500,
        "caveats": [
          "QBI-adjusted break-even never reached: the QBI value given up outweighs the payroll-tax saving at this salary share."
        ],
        "distribution": 75000,
        "filing_status": "single",
        "five_year_savings": 33596.62,
        "half_se_tax_deduction": 10597.16,
        "net_annual_savings": 6719.32,
        "net_annual_savings_qbi_adjusted": -8130.68,
        "net_se_income": 150000,
        "owner_health_premium_annual": 0,
        "qbi_199a_deduction_tentative": 15000,
        "qbi_199a_income": 75000,
        "qbi_199a_value_at_risk": 14850,
        "qbi_adjusted_break_even_income": null,
        "reasonable_salary_pct": 50,
        "reasonable_w2_salary": 75000,
        "scope_note": "Deterministic 2026 model, not tax advice. The 92.35% SE factor is applied to net earnings from self-employment only, never to W-2 wages (IRS Topic 554) — the port corrects Apex #111 on this point by adjudication of record. The 0.9% Additional Medicare Tax above $200K single / $250K MFJ is NOT modeled. The QBI section 199A trade-off values wages at the adjudicated 19.8% effective rate, flags (from net income as a taxable-income proxy) the $201,775 single / $403,500 MFJ threshold and phase-out band, and cannot see SSTB status, which disallows the deduction inside the band. Break-even is the first point of a 500-step grid, within one step of the continuous break-even.",
        "scorp_employer_tax": 5737.5,
        "scorp_payroll_tax": 11475,
        "se_tax_savings": 9719.32,
        "sole_prop_se_tax": 21194.32,
        "verdict": "SCORP_WINS"
      }
    }
  }
}