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Posted on January 8, 2026 in tax planning,taxes
What is a disregarded entity for Nevada tax purposes? The answer is slightly simpler than it is in many other states. A disregarded entity is a business that the government treats as not separate from its owner when collecting taxes. Most disregarded entities are limited liability companies owned by a single member (SMLLCs). In Nevada, SMLLCs do not pay taxes directly; their profits are reported on the owner’s income tax return.
If you operate as a disregarded entity in Nevada, you need to understand exactly what that entails. With over 30 years of experience in tax law, Ken R. Ashworth & Associates has the answers you need.
Once you’ve registered your SMLLC in Nevada, it’s already a disregarded entity by default. Now, you need to file your taxes accordingly.
To report business income for a disregarded entity on your individual tax return (Form 1040), you should generally fill out a Schedule C form and attach it to your return. Schedule C is used to report various types of profits and losses for businesses where you are the sole owner, which SMLLCS fall into by definition.
If you want to co-own an LLC with your spouse, you can still operate as a disregarded entity. In community property states like Nevada, where all assets gained during marriage are considered the joint property of both spouses, married couples can treat an LLC owned this way as an SMLLC if they are the only members. This treatment is triggered by reporting business income on your joint tax return in the same way as on an individual return.
The government only “disregards” your SMLLC as far as income tax is concerned. You still need to comply with Nevada’s licensing requirements and fees.
When you register your LLC with the Secretary of State, you must submit several documents, each of which has an associated fee. The first is your business’s Articles of Organization, which is the document that officially creates your LLC; it costs $75 to file. The Initial List of General Partners, which sets out the names of your LLC’s members, costs $150, and an application for a mandatory Nevada Business License costs $200. The total cost is $425 (or $436 with card fees).
You must renew your license and re-submit your List of General Partners (a $350 total fee) annually by the last day of the anniversary month of your LLC’s registration. Missing this deadline can cause you to incur additional fees and mean the eventual dissolution of your business.
On the Nevada Small Business Development Center’s 2025 Small Business Challenges Survey, 34% of respondents with startups reported that one of the main challenges they faced was navigating business licensing requirements. If you’re stuck, consider consulting a business attorney knowledgeable about Nevada’s LLC requirements.
Tax-wise, most SMLLCs function similarly to sole proprietorships, which are unregistered, unincorporated businesses owned by a single person who assumes all liabilities. When you start doing business as an individual in Nevada, you are by default a sole proprietor until you register an LLC.
You may wonder what the point of registering an LLC is in this case. The most obvious benefit is that an LLC can shield its owner from personal liability. This means that someone taking legal action against an LLC can’t generally pursue the owner’s personal assets.
Moreover, LLCs project more credibility to customers and lenders than sole proprietorships. You may have an easier time getting business funding as an LLC than as a sole proprietor.
In 2025, the US Small Business Administration reported that Nevada is home to over 350,000 small businesses, which make up 99.3% of all businesses in Nevada. Around 4 in 10 small businesses are registered as LLCs, according to Forbes.
A: Forming an LLC in Nevada is a multi-step affair. You must choose a unique business name and designate someone to receive mail for your LLC (a “registered agent”), file Articles of Organization and an Initial List with the Secretary of State, and receive an EIN from the IRS. A lawyer from our firm can help you do this.
A: Your business is a disregarded entity if it has a qualifying business structure, like an SMLLC, and you haven’t chosen another tax treatment. If you’re unsure, you may want to hire a tax lawyer to help ensure that you are filing taxes correctly. You’ll report your business’s income taxes on your personal tax return if your business is a disregarded entity.
A: An operating agreement is not required in Nevada; however, you should strongly consider creating one anyway. An operating agreement, which sets out an LLC’s rules and structure, may seem silly if you’re the LLC’s sole owner, but it helps create critical legal distance between yourself and your business. Banks may require you to have one to take out business loans. A tax attorney can help you draft it.
A: You can’t avoid the business license fee in Nevada unless your company qualifies for a statutory exemption. For example, tax-exempt non-profits are exempt from the fee, as are film-making businesses registered with the Division of Motion Pictures. If you run your business out of your home and earn up to 66.6% of the average annual wage, or if you’re a landlord who rents up to four units, you’re also exempt. To see more exemptions, consult the State Business License FAQ.
Ken R. Ashworth & Associates is a full-service firm focused on tax planning and business formation. Mr. Ashworth has practiced law in Nevada for more than three decades and serves as one of Las Vegas’s premier tax attorneys.
Whether you need a strong trial litigator to represent you in your tax case or a knowledgeable consultant to help you create and maintain your single-member LLC, contact us today to schedule a consultation. We have offices in Las Vegas (Summerlin) and Henderson.
