Countertop Fabrication Business: S-Corp vs. Sole Proprietorship Tax Comparison

By Yarik Yarosh, CPA ·September 5, 2026 ·4 min read

Written by Yarik Yarosh, CPA (US & Canada) September 5, 2026 · FL CPA license AC61704 · CPA Ontario

Countertop fabrication is a capital-intensive trade. A professional shop needs a bridge saw ($20,000-$80,000), CNC stone cutter ($50,000-$200,000), polishing equipment, and a properly ventilated workshop. Stone slabs (granite, quartz, marble, quartzite) are expensive raw materials at $40-$150 per square foot wholesale. The combination creates significant Section 179 deductions in startup years and ongoing material deductions throughout operations. The work is NOT a specified service trade or business (SSTB) under IRC 199A, so the 20% QBI deduction applies fully.

✓Key takeaway

Countertop fabrication S-Corp analysis:

Industry characteristics:

Revenue per kitchen countertop: $3,000-$8,000 (granite/quartz)
Revenue per bathroom vanity: $800-$2,500
Revenue per commercial project: $10,000-$100,000+
Materials: 35-45% of revenue (stone slabs, adhesives, sealer)
Equipment: bridge saw ($20,000-$80,000), CNC ($50,000-$200,000), polisher, edge profiler
Workers’ comp: 5-8% of payroll
Shop lease: $2,000-$6,000/month (need water, dust collection, crane/forklift access)
Licensing: varies by state (some require no specific license)

NOT an SSTB: Stone fabrication is a manufacturing/construction trade. Full QBI deduction at all income levels.

S-Corp break-even (at 6% workers’ comp):

At $90,000 net profit:

Sole prop SE tax: $12,710
S-Corp: salary $48,000, WC $2,880, employer FICA $3,672, payroll $1,200, return $1,000
S-Corp total: $8,752
Savings: $3,958

At $140,000 net profit:

Sole prop SE tax: $19,770
S-Corp: salary $60,000, WC $3,600, employer FICA $4,590, payroll $1,200, return $1,000
S-Corp total: $10,390
Savings: $9,380

At $200,000 net profit:

Sole prop SE tax: $24,694
S-Corp: salary $70,000, WC $4,200, employer FICA $5,355, payroll $1,200, return $1,000
S-Corp total: $11,755
Savings: $12,939

Break-even: approximately $55,000-$65,000 net profit. Most countertop fabrication shops cross this threshold quickly because per-job revenue is high relative to the operator’s time investment.

What does a countertop fabricator’s taxes look like?

Hypothetical example

Round numbers. A countertop fabrication S-Corp. Revenue: $400,000 (80 kitchen/bath jobs at $5,000 average). Owner operates the shop, has 2 W-2 employees (fabricator and installer). Single filer.

Revenue: $400,000

Expenses:

Materials (stone slabs, adhesives, sealer): $160,000 (40%)
Employee wages: $75,000
Employer payroll taxes: $5,738
Workers’ comp (6%): $9,300
Owner W-2 salary: $60,000
Employer FICA on owner: $4,590
Shop lease: $36,000
Equipment maintenance: $5,000
Delivery vehicle: $8,000
Insurance (GL + auto + equipment): $6,000
Marketing: $8,000
Software, phone, utilities: $5,000
Total expenses: $382,628

S-Corp net income (K-1): $17,372

Owner’s taxes:

W-2: $60,000 + K-1: $17,372 = $77,372
Employee FICA: $4,590
QBI on K-1: $17,372 x 20% = $3,474
Taxable income: $77,372 - $15,000 - $3,474 = $58,898
Income tax: approximately $7,900
Total: $12,490

CNC purchase year: A $120,000 CNC stone cutter purchased via Section 179 or bonus depreciation:

K-1 before depreciation: $17,372
Section 179 limited to S-Corp income: $17,372 (cannot create a loss)
Remaining $102,628: carry forward, OR use bonus depreciation instead
Bonus depreciation: $120,000 deduction, creating ($102,628) K-1 loss
The loss offsets the owner’s W-2 salary, reducing total income to ($42,628) before other deductions
Significant tax reduction (potentially $0 income tax in the purchase year)

This is the classic scenario where bonus depreciation (no income limitation) is preferred over Section 179 (limited to business income) for S-Corp owners making large equipment purchases.

Illustrative numbers only, not a real client and not advice for your facts.

When does it make sense to elect S-Corp taxation for my LLC?

The general rule of thumb is when your net self-employment income consistently exceeds $40,000-50,000 annually. Below that, the S-Corp’s added compliance costs (payroll processing, quarterly payroll tax filings, a separate corporate return) often exceed the FICA savings. The calculation is straightforward: an S-Corp pays FICA only on the owner’s reasonable salary, not on distributions above that salary. If your LLC earns $100,000 and a reasonable salary is $60,000, you save roughly $6,120 in self-employment tax on the $40,000 distributed as profit (15.3% x $40,000). Subtract $2,000-3,000 in added compliance costs for payroll and the separate S-Corp return, and you net $3,000-4,000 in annual savings. File Form 2553 by March 15 for a calendar-year election, or within 75 days of forming the LLC for a mid-year start.

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Cite this page

Yarik Yarosh, CPA. "Countertop Fabrication Business: S-Corp vs. Sole Proprietorship Tax Comparison." Blue Cloud CPA, September 5, 2026. https://bluecloudcpa.com/guides/countertop-fabrication-entity-structure-scorp

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.