Nevada Business Taxes for LLCs

How Your LLC Will Be Taxed

In this guide, you'll learn about the main types of New York business tax you'll be responsible for, including sales, self-employment, payroll, and federal taxes. Profits from an LLC aren’t taxed at the business level the way they are in C Corporations. Instead, they're as follows:

Items 1 and 2 fall under pass-through taxation for LLC owners, managers and members who profit from the business. Profits are reported on personal federal tax returns.

State Taxes for LLCs

There are two state taxes you must pay to the Nevada Department of Taxation: sales and commerce.

Nevada Income Tax

Nevada is one of nine states that do not have income taxes.

Nevada Sales Tax

If you sell physical products or certain types of services, you may need to collect sales tax and then pay it to the Department of Taxation. Sales tax is collected at the point of purchase and varies depending on the region, county or city where your business is located.

Most states don’t levy sales tax on goods that are considered necessities, such as food, medications, clothing, or gas. Use our sales tax calculator to get an idea of what you'll need to pay, but always check with your accountant and the Department of Taxation to confirm whether your business is required to collect Nevada sales tax, and to ensure you're paying the correct amount.

Nevada Commerce Tax

Some states levy a tax on certain businesses for the privilege of doing business in the state. In many cases, it's called a franchise tax, though some states call it a transaction privilege tax or simply a privilege tax. In Nevada, it's known as a commerce tax. If your business generates more than $4,000,000 in gross revenue in a tax year, you'll be required to file a Nevada Commerce Tax return. If your revenue reaches that mark, talk to your accountant or professional tax preparer to ensure you correctly file your Nevada Commerce Tax return.

Federal Taxes for LLCs

As the owner of an LLC, you must pay self-employment tax and federal income tax, both of which are levied as “pass-through taxation."

Federal taxes can be complicated, so speak to your accountant or professional tax preparer to ensure that your Nevada LLC is paying the correct amount.

Federal Self-Employment Tax

All members or managers who take profits out of the LLC must pay self-employment tax. This tax is administered by the Federal Insurance Contributions Act (FICA) and covers Social Security, Medicare, and other benefits. The current self-employment tax rate is 15.3%. You’ll be able to deduct some of your business expenses from your income when calculating how much self-employment tax you owe.

Pay Less Self-Employment Tax by Treating Your LLC as an S Corporation

The Internal Revenue Service allows an LLC to be treated as an S Corporation for tax purposes, provided your business meets certain requirements. This can help you reduce the amount of self-employment tax you pay by allowing you to declare some of your income as salary and other income as distributions or withdrawals. You do this by filing Form 2553 with the IRS. Bizee can also file the form for you. Use our S Corp Tax Calculator to get an idea of how much money you could save with this election. Consult with your accountant or tax advisor for more information on reducing your LLC self-employment tax through an S Corporation tax election.

Federal Income Tax

You must also pay regular federal income tax on any earnings you take out of your LLC. The amount of income tax you pay depends on your earnings, current income tax bracket, deductions, and filing status. You only pay federal income tax on profits you take out of the business, less certain deductions and allowances. This includes your tax-free amount, plus business expenses and other deductions for areas such as healthcare and some retirement plans. Speak to your accountant for more information.

Employee and Employer Taxes

If you pay employees, there are some slightly different tax implications. Speak to your accountant to get clear guidance for your unique situation.

Employees May Need to File Tax Returns

Regardless of whether you withhold federal and state income tax, your employees may need to file their own tax returns.

Employee Insurance and Other Requirements

You may also need to pay insurance for any employees, such as employee compensation insurance or unemployment tax.

Other Taxes and Duties

Depending on your industry, you may be liable for certain other taxes and duties. For example, if you sell gasoline, you may need to pay a tax on any fuel you sell. Likewise, if you import or export goods, you may need to pay certain duties. Speak to your accountant about any other taxes or duties you may need to withhold or pay.

Estimated Taxes

Most LLCs must pay estimated taxes throughout the year, depending on the amount of profit and income you expect to make. The most common types of estimated tax are:

Most LLCs will pay estimated taxes on a quarterly basis. Learn more on the IRS website, and speak to your accountant for more information.

FAQs on Nevada Business Tax