You can find a great many myths on the internet where so-called “experts” will tell you everything you want to know about incorporating a business in Nevada. The fact of the matter is that many of these myths can land you in hot water if you are not careful, so let’s take a look at some of them as well as the advantages of incorporating in Nevada.
Myth #1 – Nevada Corporations Don’t Pay State Income Tax
This is partially true. If the corporation or LLC is formed in Nevada, but does all of its business in another state, then no, the corporation does not pay income taxes to the State of Nevada. However, if, for example, you live in California, but your business is incorporated in Nevada, you will still need to pay California’s income taxes on your income.
It is important for you to discuss this with a qualified accountant who can walk you through the details.
Myth #2 – A Mailbox or Virtual Office is Sufficient for Nevada Registration
Not true at all. In fact, all you need to incorporate your business in the State of Nevada is a registered agent who can accept Service of Process on your behalf.
Myth #3 – Incorporating Protects Owners from Personal Liability
Incorporating your business does not absolve you of all responsibility and liability. You may still be held responsible for contracts you sign, guarantees you make, and any lapses in corporate compliance paperwork.
Myth #4 – Incorporated Businesses Qualify for More Deductions
This is true, and not true. Incorporated businesses can save money on payroll taxes and self-employment taxes. However, that doesn’t mean that you can deduct vacations or other personal expenses that are not directly related to the operation of the business.
Myth #5 – Incorporating Shelters Income
All corporation profits are subject to income tax. This tax may be paid by the corporation, the shareholders or both depending on the structure of the corporation. Selecting the proper structure of your corporation can, however, help to reduce taxes.
Myth #6 – It’s Expensive to Incorporate in Nevada
This is not true at all. In fact, the fees and costs associated with setting up a business in Nevada are comparable to the same expenses you will encounter in other states.
The exception to this is if you choose to hire an agent to work on your behalf, in which case the agent will charge a fee for their services and assistance incorporating your business within Nevada.
Myth #7 The Secretary of State does not Share Information with the IRS
Not entirely true. The Nevada Secretary of State does not directly share your information with the IRS. However, the information is available as a matter of public record and IRS agents, bill collectors, ex-spouses, etc. may readily access this information via the Nevada Secretary of State website.
We invite you to contact Corporate Capital at 855-371-0070 to learn more about the advantages of incorporating your business in Nevada. We will be happy to answer your questions and give you the answers you need to make the right decision for the future of your business.