Do-it-yourself Nevada S Corporation Kit
The expiration of the Bush tax cuts as well as the additional taxes from the healthcare laws in the Patient Protection and Affordable Care Act (sometimes referred to as Obamacare) mean many small businesses in Nevada and all over the country will face an increase in taxes in the next year.
Fortunately, there are ways to lower your business's taxes. One of the most effective ways to lower your taxes is to operate your business as an S corporation. S corporations can save business owners thousands of dollars a year in payroll and income taxes, and the set-up is actually quite simple. All you need to do is fill out three forms:
Caution: Don't decide to incorporate in Nevada if you're operating outside of Nevada without first reading this article.
1. Articles of Organization/Articles of Incorporation
Before you fill out your first form, you need to decide whether you want to use a limited liability company or a regular corporation as the base for your S corporation. Personally, I recommend using an LLC to build an S corporation because LLCs are easier to maintain.
If you do want to use an LLC as the basis for your S corporation, fill out an Articles of Organization form to create an LLC. This form is available from the Nevada Secretary of State's website. Alternatively, to use a traditional corporation as the basis for your corporation, fill out an Articles of Incorporation form. Submit your completed form to the Secretary of State's Office in Carson City.
2. SS-4 Form Application for Employer Identification Number
The second form you need to fill out is an SS-4 form. This form is an application for an Employer Identification Number, or EIN, with the Internal Revenue Service. The IRS provides downloadable versions of this form on its website. Submit this completed form to the Internal Revenue Service.
3. 2553 Form Election by Small Business Corporation
To make the S corporation election, fill out a 2553 form and submit it to the Internal Revenue Service Center in Ogden, Utah. This form tells the IRS that you want your business to be treated using the laws found in Subchapter s of the Internal Revenue Code. Once the IRS receives your application, they will check to make sure that your business is eligible to make the election and that you followed correct procedure in making the election.
If you want a more detailed set of instructions than what's above, consider purchasing and downloading one of my do-it-yourself S corporation kits. I created two versions of the kit: one for businesses using an LLC to build their S corporation, and one for businesses using a regular corporation.
LLC Do-It-Yourself Kit
The LLC version of my do-it-yourself S corporation kit provides a detailed set of instructions to guide you through the Nevada LLC set-up process. It includes completed examples of all the forms involved to make filling them out as easy as possible. I also included two sets of example LLC operating agreements. One set is for LLCs with one owner, and the other is for LLCs with two or more owners.Purchase and Download
Corporation Do-It-Yourself Kit
I also provide a corporation version of the Nevada kit for business owners who choose to use a corporation rather than an LLC to build their S corporation. This kit provides clear instructions and examples of completed forms for reference. It also includes a set of sample corporate bylaws. You or your attorney can use these bylaws as a guide when writing up your own corporate bylaws.Purchase and Download
Additional Information You May Find Useful
If you want additional information about how to maximize the tax savings related to running a business or investment venture, you may also be interested in one of our downloadable e-books (see descriptions below). Each book covers a category of tax planning topics that easily save a business owner significant amounts of income or self-employment taxes (potentially thousands of dollars a year) and is instantly downloadable.
Often the best tax saving tool private companies have? The Section 199A deduction which allows them to avoid taxes on the last 20 percent of their income.Read More
Using an S corporation for your business? To maximize savings, you need to minimize the salary paid to shareholders. But this decision is tricky.Read More
Nearly secret, the federal government's employee retention credits provide tremendous payroll tax savings for most small businesses... A new book from our firm explains.Info here