Stack of documents with a paperweight on a leather desk pad, Nevada LLC vs S Corp: Fees, Taxes and Break-Even

Nevada LLC vs S Corp: Fees, Taxes and Break-Even

Last verified: November 5, 2026

This page is for Nevada owners who already have an LLC, or are about to form one, and want to know whether an S corporation tax election is worth the extra payroll work. Our position: form the LLC first and treat the S election as a later tax decision. Nevada has no state income tax, so the election changes your federal self-employment tax and almost nothing else, and it only pays once your profit is high enough to cover the payroll and tax-return costs it creates.

If you have already decided on a corporation, the formation steps are in How to Start an S Corp in Nevada. If you are still choosing between an LLC and a regular corporation, read Nevada LLC vs Corporation first.

An S Corp Is a Tax Election, Not a Nevada Entity

Nevada does not register "S corporations." You form an LLC under NRS chapter 86 or a corporation under NRS chapter 78, then ask the IRS to tax it as an S corporation. The S election is purely a federal classification, and the Nevada Department of Taxation states that Nevada does not impose a state income tax on individuals. The comparison on this page is therefore about federal tax and state fees, not state income tax.

  • Default LLC taxes: a single-member LLC is disregarded and its profit lands on your personal return; an LLC with two or more members is taxed as a partnership (IRS, "Limited liability company").
  • The election: an eligible LLC or corporation files IRS Form 2553, due no more than 2 months and 15 days after the beginning of the tax year the election takes effect (IRS, Instructions for Form 2553).
  • Who qualifies: no nonresident alien shareholders and only one class of stock, meaning every share carries identical distribution and liquidation rights (same instructions).
  • IRS fee: the instructions list no filing fee for the election itself; the cost is the extra compliance work covered below.

Nevada State Fees: LLC Versus Corporation

Do not assume Nevada fees stay the same whichever route you pick: the license differs. A corporation pays a $500 State Business License; an LLC pays $200. An LLC that files Form 2553 stays an LLC for state purposes, so the election itself adds nothing to your Nevada bill. Forming a corporation instead adds $300 a year.

ItemLLCCorporationSource
Articles filing$75$75 at $75,000 or less in authorized sharesNRS 86.561, NRS 78.760
Initial list$150$150NRS 86.263, NRS 78.150
State Business License, first year$200$500NRS 76.100
First-year state total$425$725Sum of the rows above
Annual list, each year after$150$150 at $75,000 or less in authorized sharesNRS 86.263, NRS 78.150
License renewal, each year$200$500NRS 76.130
Recurring state total$350$650Sum of the rows above

A corporation with more authorized shares pays a higher filing fee and annual list fee on a sliding scale in NRS chapter 78. The due dates and renewal steps are in our Nevada annual list and license renewal guide, and the full first-year picture is in What It Costs to Start a Business in Nevada. If you would rather not file the articles yourself, compare LLC formation services in Nevada.

Where the S Election Saves Money: Self-Employment Tax

An owner of a default LLC pays self-employment tax at 15.3% (12.4% Social Security plus 2.9% Medicare) on 92.35% of net earnings from self-employment (IRS, "Self-employment tax" and Tax Topic 554). For 2026 the Social Security part applies to the first $184,500 of combined wages and net earnings. An S corporation owner who works in the business is an employee, so the salary carries the same 15.3% combined payroll tax, but profit paid out as a distribution above that salary does not.

So the saving is 15.3% times (92.35% of net profit minus your salary). The table applies that formula; the salary column is an assumption we picked for the arithmetic, not a figure the IRS endorses, and every row stays under the Social Security wage base.

Net profitAssumed salaryDefault LLC tax vs S corp payroll taxDifference before costs
$40,000$30,000$5,652 vs $4,590$1,062
$60,000$40,000$8,478 vs $6,120$2,358
$80,000$50,000$11,304 vs $7,650$3,654
$120,000$70,000$16,955 vs $10,710$6,245
$160,000$90,000$22,607 vs $13,770$8,837

These are our calculations from the IRS rates, rounded to the dollar. They ignore federal income tax effects, such as the deduction a default LLC owner gets for the employer-equivalent half of self-employment tax, so a CPA should run your real numbers.

Nevada's Modified Business Tax and Your Own Salary

This is the Nevada-specific cost the election can create. A default single-owner LLC with no employees has no payroll to report. Once your S corporation pays you wages, it is an employer, and the Department of Taxation says all employers must file the Modified Business Tax return, quarterly, even when no tax is due.

  • Rate: 1.17% of a quarter's wages above $50,000 for most general businesses, effective July 1, 2023 (Department of Taxation). The statutory base rate in NRS 363B.110 is 1.475%, reduced under NRS 360.203.
  • Typical solo owner: a $90,000 salary is $22,500 a quarter, under the $50,000 exemption, so the tax is $0 and the cost is the return.
  • When it bites: a $240,000 salary paid evenly is $60,000 a quarter, which is $10,000 over the exemption, about $117 a quarter or $468 a year.

Confirm with the Department of Taxation how your owner salary is reported. Details are in our Modified Business Tax guide. The separate Commerce Tax applies only above $4,000,000 in Nevada gross revenue per fiscal year, so it does not separate an LLC from an S corporation for a small business (see Nevada Commerce Tax explained).

Reasonable Salary Decides the Math

The IRS requires an S corporation to pay a shareholder-employee reasonable compensation for the services they provide before non-wage distributions are made, and it can reclassify distributions as wages if the salary is too low. Its guidance says the key is what the shareholder-employee did for the corporation, judged from the source of the gross receipts: your own services, other employees' services, or capital and equipment.

That is why a one-person consulting practice and a shop with five employees and expensive equipment get different answers. The first earns almost entirely from your labor, so a large share must be salary. The second can credibly pay a smaller share as salary because equipment and staff produce part of the receipts.

What the Election Adds to Your Workload

  • Payroll for yourself, with a Form W-2 each year (IRS, About Form W-2).
  • Quarterly federal payroll returns on Form 941, plus the quarterly Nevada Modified Business Tax return.
  • An annual Form 1120-S instead of a Schedule C or partnership return.
  • The same Nevada annual list and license renewal as before.

We do not publish typical prices for payroll service or 1120-S preparation because we have no sourced figure for Nevada. Get written quotes instead, then divide the yearly total by 0.153. The result is how much net earnings above salary must move out of self-employment tax before you break even: a $2,000 yearly cost needs about $13,100.

Liability Protection Is the Same Either Way

The shield comes from the entity, not the tax election. Under NRS 86.371, no member or manager of a Nevada LLC is individually liable for the company's debts unless the articles or a signed agreement say so. NRS 78.747 sets the alter ego test for corporations. Neither protects you from:

  • Harm you personally cause.
  • Loans you personally guarantee.
  • Unpaid withheld payroll taxes, which the IRS can assess against responsible individuals through the Trust Fund Recovery Penalty. This matters more after an election, because you now run payroll.

When to Stay an LLC and When to Elect

Stay an LLC when:

  • The difference in the table is smaller than the quotes you get for payroll and the 1120-S.
  • You cannot explain a salary that would hold up against the IRS reasonable-compensation test.
  • Your LLC has several members who split profit unevenly, because the one-class-of-stock rule requires identical distribution rights.
  • An owner is a nonresident alien, who cannot be an S corporation shareholder.
  • Your income is irregular or you expect losses, and you do not want to run payroll through the gaps.

Elect S corporation status when:

  • Your quotes are well below the difference the formula gives for your net profit and a defensible salary.
  • Your income is steady enough to run payroll every pay period.
  • You already have an LLC, because you can elect without forming a corporation and keep the $200 license.

If you live outside Nevada, your home state's tax rules apply and can change this math, which is another reason to ask a CPA before filing.

How to Make the Election From a Nevada LLC

Step 1: Form the LLC and Get an EIN

File the articles and pay the $75 fee, then the initial list and license. The EIN is free from the IRS (IRS, apply for an EIN online); our Nevada LLC guide and EIN guide walk through both.

Step 2: File Form 2553

File it with the IRS within 2 months and 15 days of the beginning of the tax year the election should take effect, and have every shareholder sign. The instructions point to Revenue Procedure 2013-30 for late-election relief, which is worth a CPA's time if you missed the date (IRS, About Form 2553).

Step 3: Start Payroll and Register as an Employer

Pay yourself the salary your CPA supports, and file the quarterly federal and Nevada returns described above.

Step 4: Keep Paying the Nevada LLC Fees

The $150 annual list and $200 license renewal continue, $350 a year in total.

Important Disclaimer

This guide is informational only and is not tax or legal advice. S corporation elections turn on reasonable-compensation facts that differ for every business, and the figures above are arithmetic examples, not predictions. Before you file Form 2553, ask a Nevada CPA or tax attorney to run your numbers, and confirm Nevada filing questions with the Nevada Secretary of State or the Nevada Department of Taxation.

Sources

Keep exploring: related Nevada guides