How to Start an S Corp in Nevada
Beyond Nevada’s booming gaming industry, businesses of all sizes play a vital role in the state’s economy. Setting up your business as an S corporation (S corp) can provide many benefits. Whether you plan to operate within the tourism, aerospace, or manufacturing industries, electing S corp status can save your business money on its taxes.
This guide will help you understand the benefits of forming a Nevada S corp and offer tips for maintaining it in good standing for years to come.
If you’re not in Nevada, check out our other How to Start an S Corp guides to learn more.
Recommended: If you have at least $60,000 in net earnings, an S corp may offer tax advantages. Let Northwest start your S corp today.
Factors to Consider Before Starting an S Corp in Nevada
Before forming an S corp, you have to consider the following factors:
- Is an S corporation the best strategy for your business?
- S corporation restrictions
- Are S corp tax advantages right for you?
Is an S Corporation the Best Strategy for Your Business?
For help with choosing the right structure for your business, visit our Choosing a Business Structure guide.
S Corporation Restrictions
S corps have several restrictions, such as being limited to one class of stock and 100 shareholders. Read our What Is an S Corporation guide for full details.
Are S Corp Tax Advantages Right for You?
An S corporation is a tax designation that can be elected by a limited liability company (LLC) or corporation. With an S corp, business owners are considered employees of the company and must receive a reasonable salary. Since all S corps technically have employees, the s corp must run payroll.
In order to benefit from a Nevada S corp tax designation, your business needs to make enough money to offset payroll expenses. Furthermore, S corps are beneficial for business owners who take large distributions in addition to their salary.
To learn more about the tax advantages of an S corp, read our LLC vs. S corp guide and take a look at our S Corp tax calculator.
For a Free Consultation with a Tax Professional
How to Form a Nevada S Corp
There are two main ways to start an S corp:
- By forming an LLC and electing S corp tax status from the IRS when you request your employee identification number (EIN)
- By forming a corporation and electing S corp status from the IRS
We recommend forming an LLC because it’s simpler and more cost-effective.
Recommended: If you have an existing LLC, visit our How to Convert an LLC to S Corp guide.
Steps for Forming an LLC and Electing S Corp Status in Nevada
Starting a Nevada LLC and electing S corp tax status is easy. You can use our guides to start an LLC with the S corp status yourself, or you can hire a service provider like Northwest to guide you through this process.
There are five basic steps to start an LLC and elect S corp status:
Step 1: Name Your LLC
Step 2: Choose a Registered Agent
Step 3: File the Articles of Organization
Step 4: Create an Operating Agreement
Step 5: Get an EIN and File Form 2553 to Elect S Corp Tax Status
Step 1: Name Your LLC
Choosing a company name is the first and most important step in starting your LLC in Nevada.
Be sure to choose a name that complies with Nevada naming requirements and is easily searchable by potential clients.
1. Follow the naming guidelines for a Nevada LLC:
- Your name must include the words “Limited-Liability Company,” “Limited Liability Company,” “Limited Company,” or “Limited” or the abbreviations “Ltd.,” “L.L.C.,” “L.C.,” “LLC” or “LC.” The word “Company” may be abbreviated as “Co.”
- Nevada requires you to get approval to use certain words in your corporation’s name.
- You need approval from the Nevada State Board of Accounting to use the following words: accountant, accountancy, accounting, auditor, auditing, certified public accountant, and CPA.
- You need approval from the Nevada Commissioner of Financial Institutions to use the following words: bank, banc, banque, savings & loan, banker, bancard, banq, thrift, banking, banco, bancor, trustee, interbanking, bancorp, credit union, debt collection, collection agency, or trust.
- You need approval from the Commissioner of Insurance to use the following words: adjuster, indemnity, reinsurance, underwriter, annuity, insurance, risk retention group, underwriting, casualty, life & accident, surety, bail, bail bonds, fugitive recovery, bail bondsman/men, bounty hunter, and bale.
- You need approval from the Commissioner of Mortgage lending to use the following words: financial, mortgage, mortgage banking.
- You need approval from the State Board of Professional Engineers to use the following words: engineer, engineered, engineering, professional engineer, registered engineer, and licensed engineer.
- You need approval from the State Board of Architecture, Interior Design and Residential Design to use the following words: architect, architecture, registered architect, licensed architect, registered interior designer, registered interior design, residential designer, registered residential designer, licensed residential designer, and residential design.
- You need approval from the Administrator of the Real Estate Division of the Department of Business and Industry to use the words: common-interest community, community association, master association, unit-owners’ association, and homeowners’ association.
- You need approval from the Ombudsman to include the following words: common-interest community, community association, hoa, home owners association, master association, unit-owners association, and property owners.
- You also need approval to use the following words: college, university, higher education.
You can also read the Nevada state statute about LLC naming guidelines for more information.
2. Is the name available in Nevada? You can use the business entity search on the Nevada Secretary of State website to see if your desired LLC name is available.
3. Is the URL available? We recommend checking to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.
Step 2: Choose Your Nevada Registered Agent
You must elect a registered agent for your Nevada LLC.
An LLC registered agent will accept legal documents and tax notices on your LLC's behalf. You will list your registered agent when you file your LLC's Articles of Organization.
Many business owners choose to hire a registered agent service. Many of these services will form your LLC for a small fee and include the first year of registered agent services for free.
Nevada Registered Agent Consent to Appointment
Nevada registered agents must consent to their appointment by submitting a Registered Agent Acceptance form.
The form includes:
- Your LLC’s name
- The name of the registered agent
- The signature of the registered agent
- The date of execution
The acceptance form is also included in the hard copy Nevada LLC formation packet.
Step 3: File the Nevada LLC Articles of Organization
The Nevada Articles of Organization is used to officially register an LLC.
File Your Nevada Articles of Incorporation
OPTION 1: File Online With Nevada SilverFlume
File Online- OR -
OPTION 2: File by Mail, by Fax, by Email, or In Person
Download FormState Filing Cost: $425 ($75 Articles of Incorporation + $150 Initial List of Managers or Members + $200 Business License Application), payable to the Secretary of State (Nonrefundable)
Filing Address:
Secretary of State
Commercial Recordings Division
202 N. Carson St.
Carson City, NV 89701-4201
Fax: (775) 684-5725
Email: newfilings@sos.nv.gov
Step 4: Create an LLC Operating Agreement
An LLC operating agreement is a legal document that outlines the ownership and member duties of your LLC.
For more information, read our Nevada LLC Operating Agreement guide.
Our operating agreement tool is a free resource for business owners.
Step 5: Get an EIN and Complete Form 2553 on the IRS Website
An EIN is a number that is used by the US Internal Revenue Service (IRS) to identify and tax businesses. It is essentially a Social Security number for a business.
EINs are free when you apply directly with the IRS.
Elect S Corp Tax Status
During the online EIN application, the IRS will provide a link to Form 2553, the Election By a Small Business form.
Visit our Form 2553 Instructions guide for detailed help with completing the form.
This is the form to elect S corp tax status for your LLC:
Ready to start saving on your taxes?
We recommend using a formation service to start your Nevada S corp for you, so you can focus on the things that matter most — growing your business.
Keep Your Nevada S Corp Compliant
After you set up your Nevada S corp, you’ll want to ensure your business remains in good standing. Like most businesses, you’ll need to follow all Nevada state laws and guidelines. Nevada requires businesses to pay Nevada state taxes each year and file an annual list.
Nevada S Corp Annual List
Even when you elect the S corp tax designation for your business, Nevada will still treat it as an LLC. As such, the state will require you to file a Nevada annual list and state business license application — also known as an annual report. You must file these each year with the Nevada Secretary of State’s Commercial Recordings Division.
The filing fee is $150 for the annual list and $200 for the state business license. The filing deadline is the end of your business’s registration anniversary. If you filed to incorporate your business in June, for example, your annual list and state business license would be due every year by June 30. You can start to file up to 90 days prior to the due date.
Visit our Nevada LLC Annual List guide for a step-by-step overview of the filing process.
Nevada S Corp Taxes
S corporations benefit from pass-through taxation, meaning the business’s profits pass-through to S corp owners’ individual tax returns. S corp owners make money from their reasonable salary and distributions, and Nevada S corp owners can expect to pay the following taxes:
Federal Self-Employment Taxes
Self-employment taxes cover social security and medicare. The self-employment tax rate is 15.3%, and money you take as salary will be subjected to the self-employment tax. However, distributions are not subjected to this tax.
Federal Income Taxes
Your federal income taxes will depend on your tax bracket, and the cutoffs for individual tax brackets as well as the percent owed will change each year. Both your salary and distributions are subjected to federal income tax.
Nevada Income Taxes
Nevada doesn’t have a state income tax. This means your business doesn’t have to pay corporate income tax at the state level and you, as an individual, won’t pay any state income tax. Only nine states currently lack a state income tax on individuals and businesses.
With no state income tax, Nevada’s economy thrives while business owners can reap significant savings. Operating in a state with no income tax creates an attractive landscape for businesses of any size in any industry.
Nevada Sales and Use Tax
Nevada’s sales tax is one of the highest in the nation at 6.85%. Moreover, this can vary based on the county, city, or borough in which your business operates. Cities also can impose additional taxes, making the sales tax rate as high as 8.1% in some places.
Additional State Taxes
The Nevada Department of Taxation provides details on additional state-specific taxes. Some examples of taxes small businesses may have to pay include:
- Cigarette Tax
- Liquor Tax
- Gas Tax
- Excise Taxes
- Commerce Tax
Visit the Nevada Department of Taxation for more information.
Nevada Local Taxes
Each city in Nevada can assess its own tax rates and requirements. Check with your local government to ensure your business complies with local laws and remains up to date on all local taxes.
Start a Nevada S Corp FAQ
An S corporation (S corp) is a tax designation that an LLC or a corporation can elect.
No. The default taxes for an LLC and taxes for an S corp are not the same.
With an S corp, owners pay personal income tax and self-employment tax on a predetermined salary. They may then withdraw any remaining profits from the business as a “distribution,” which isn’t subject to self-employment tax.
With an LLC, all company profits pass through to the owners’ personal tax returns, and then the owners must pay personal income tax and self-employment tax on the entire amount.
S corp owners are required to earn a “reasonable” salary, which basically means a fair market rate based on the individual’s qualifications as well as their duties and responsibilities at the company. The purpose of this requirement is to prevent S corp owners from paying themselves an artificially low salary in order to pay less self-employment tax.
A distribution is a dividend that a shareholder/owner can take from the business profits that remain after a company pays all of its employee salaries. Shareholders must pay personal income tax on distributions, but distributions aren’t subject to self-employment tax.
LLCs and corporations that operate under a “doing business as” (DBA) name can choose the S corp election.
The most prominent industries in Nevada include gaming and tourism, manufacturing, aerospace, healthcare, and mining as well as the restaurant industry. S corps can exist across various industries — as long as they meet the eligibility requirements, such as having no more than 100 shareholders. As a business owner, you can elect S corp status for your business in order to save money at tax time.
Nevada is a great state in which to form an S corp because it has an attractive tax structure and no state income tax. If your business operates in Nevada, you can take advantage of the tax benefits of S corp status and save some money.