Irrigation and Sprinkler Business: S-Corp vs. Sole Proprietorship Tax Comparison

Irrigation/sprinkler S-Corp analysis:

Industry characteristics:

• Revenue per new installation: $3,000-$8,000 (residential)
• Revenue per spring startup/repair: $100-$300
• Revenue per winterization blowout: $75-$150
• Revenue per repair call: $150-$400
• Revenue per commercial installation: $10,000-$50,000+
• Materials: 25-35% of revenue (installation), 10-20% (service/repair)
• Workers’ comp: 3-6% of payroll (low-risk, ground-level work)
• Seasonality: strong (March-November in northern states)
• Recurring revenue: winterization and spring startup create a built-in annual service base

NOT an SSTB: Irrigation is a construction/landscaping trade. Full QBI deduction at all income levels.

S-Corp break-even (at 4% workers’ comp):

At $70,000 net profit:

• Sole prop SE tax: $9,885
• S-Corp: salary $40,000, WC $1,600, employer FICA $3,060, payroll $1,200, return $1,000
• S-Corp total: $6,860
• Savings: $3,025

At $100,000 net profit:

• Sole prop SE tax: $14,122
• S-Corp: salary $50,000, WC $2,000, employer FICA $3,825, payroll $1,200, return $1,000
• S-Corp total: $8,025
• Savings: $6,097

At $150,000 net profit:

• Sole prop SE tax: $21,186
• S-Corp: salary $60,000, WC $2,400, employer FICA $4,590, payroll $1,200, return $1,000
• S-Corp total: $9,190
• Savings: $11,996

Break-even: approximately $45,000-$55,000 net profit. The low workers’ comp rate makes this one of the lowest S-Corp break-even points among the trades. Even a solo operator doing 20-30 installations and 200 service calls per year typically crosses this threshold.