2026 tax year · Nevada
Is an S-corp election worth it in Nevada?
On $100,000 of profit the election saves about $5,218 a year in Nevada, after everything Nevada charges the company.
Work it out on your own numbers
The figures below use $100,000 of profit and our standard assumptions. Put your own in instead, this compares staying a sole proprietor against electing, with Nevada's own charges on the company included:
Salary share and withdrawal share are percentages. The withdrawal figure only affects the C corporation, it is what decides whether the second layer of tax applies at all.
Enter your figures above and press Compare.
What the election is worth on $100,000 of profit
A single filer taking the standard deduction, paying themselves 40% of profit as salary, with $1,500 a year of payroll and filing cost:
| Tax as a sole proprietor | $22,365 |
| Tax as an S-corp, federal and personal state | $17,147 |
| Saving from the payroll-tax split alone | $5,218 |
| What Nevada charges the company | − $0 |
| Net saving | $5,218 |
- Nevada gross receipts tax. Commerce Tax, only if Nevada gross revenue exceeds $4,000,000 in the fiscal year; rate varies by NAICS category, roughly 0.051% to 0.331%. It is charged on turnover rather than profit, so it cannot be worked out from net profit alone. And it is owed whether or not the business made money.
The profit range where it actually pays in Nevada
From about $20,000 of profit upwards. Below that, the $1,500 of payroll cost is more than the saving.
| Net profit | Sole proprietor | S-corp, all in | Difference |
|---|---|---|---|
| $60,000 | $12,037 | $8,928 | saves $3,110 |
| $100,000 | $22,365 | $17,147 | saves $5,218 |
| $150,000 | $37,608 | $29,632 | saves $7,975 |
| $250,000 | $65,815 | $58,520 | saves $7,295 |
What Nevada does differently
Nevada levies no personal income tax, so the entire question here is federal. The election saves payroll tax on the distribution and nothing else, there is no state layer for it to move, and no state return for the S-corp's owners to reconcile.
The Nevada detail
Nevada has no corporate or personal income tax, so the federal election is irrelevant for income tax and there is no entity-level income tax. The real recurring cost is the Secretary of State package: a $150 Annual List of Officers plus a $500 State Business License for corporations, $650 a year, due regardless of profit, but a filing/license fee rather than a tax. A payroll-based Modified Business Tax also applies to employers.
How much salary to pay yourself
Enter your figures above and press Calculate.
Less salary means less payroll tax, so the arithmetic always points at the smallest salary you can justify. That is exactly why it is not a number to optimize: compensation has to be reasonable for the work you do, and the penalty for getting it wrong is reclassification plus back payroll tax. The cheapest row here is the riskiest one.
| Salary share | Salary | Distribution | Total tax | vs sole proprietor |
|---|---|---|---|---|
| 20% | $20,000 | $76,970 | $13,543 | $8,821 |
| 30% | $30,000 | $66,205 | $15,345 | $7,019 |
| 40% | $40,000 | $55,440 | $17,147 | $5,218 |
| 50% | $50,000 | $44,675 | $18,949 | $3,416 |
| 60% | $60,000 | $33,910 | $20,750 | $1,614 |
What this assumes
- Single filer, standard deduction, the business as the only income.
- 40% of profit taken as salary in the headline figures.
- $1,500 a year for payroll and a separate 1120-S, a cost estimate, not a tax figure, and it varies by provider.
- Comparing against a sole proprietorship. If you already trade through an LLC, some state fees are owed either way and are not a cost of electing.
- Anything listed as not modeled above is genuinely owed, it is excluded because it does not depend on profit, not because it is nil.
What these words mean
- Net profit
- What your business earned after business expenses, before any tax. It is the figure the self-employment tax is charged on, not what you took out of the business.
- Gross receipts
- Everything the business took in, before subtracting any costs. A tax on gross receipts is owed even by a business making a loss, which is what makes it different from a tax on profit.
- Entity level
- A tax charged to the company itself, before any profit reaches the owners, as opposed to a tax the owners pay on their own returns.
- S corporation election
- Asking the tax office to treat your company as a pass-through, so profit is taxed to you rather than to the company. The owner takes a salary and the rest as a distribution, which is what saves payroll tax.
- Distribution
- Profit paid out to a company’s owner that is not salary. It is not subject to payroll or self-employment tax, which is the whole point of the S corporation election. And why the salary has to be defensible.