October 23, 2014

In the Know

The IRS

Florida Department of Revenue and You

Barbara Miracle | 6/1/2006
Basic Tax Tips

General

Keep business and personal accounts separate. A business checking account will make it much easier to identify tax-deductible company expenses.

Create a system for record keeping. Whether you use an accounting software program such as Quicken or your own proprietary system, keep records organized and up-to-date.

File online. Many businesses are required to file Florida's sales and use tax, unemployment and other state tax forms electronically. Check myflorida.com/dor/eservices for more details.

Federal

Two useful publications are a tax calendar (Publication 1518) as well as a "Tax Guide for Small Business" (Publication 334).

Other useful IRS resources are "Circular E, Employer's Tax Guide" (Publication 15) and "Starting a Business and Keeping Records" (Publication 583). All are available on the IRS's website, irs.gov.

Free CD-ROMs are available on a variety of tax topics of interest to small business owners. Go to irs.gov and click on "Business" and then "Small Business/Self-Employed."

State

The Florida Department of Revenue website, MyFlorida.com/dor, includes information on the various types of taxes. Forms and publications are available for download. Businesses may e-register and e-file for sales and use tax, unemployment tax and other taxes. In many cases, e-payment is also available.

Small Business Taxes

FEDERAL

Federal Corporate Income Tax
Due: March 15 (if the business's fiscal year corresponds to the calendar year)
C-Corporations pay income tax using federal form 1120 or 1120A. A limited liability company classified as a corporation for federal tax purposes must file a federal corporate income tax form.

An S-Corporation generally is not liable for federal income tax, but it must file a federal form 1120S annually and pay tax on certain investment income and capital gains. Returns are due by the 15th day of the third month after the close of the corporation's fiscal year.

Federal Employment Tax
(Income, Medicare and Social Security)
Due: Monthly or semiweekly (in most cases)
Businesses that have employees must withhold federal income tax, Medicare tax and Social Security tax from employees' wages. In most cases you pay the tax monthly or semiweekly, either by the Electronic Federal Tax Payment System (required if deposits total more than $200,000 annually) or by using form 8109, Federal Tax Deposit Coupons. Report the tax on form 941, Employer's Quarterly Federal Tax Return.

New for 2006: Small employers that have an employment tax liability of $1,000 or less for the year may now pay annually. File form 944, Employer's Annual Federal Tax Return.

Federal Unemployment Tax (FUTA)
Due: January 31, April 30, July 31, October 31
Floridians are required to report wages and pay taxes to the Federal Unemployment Compensation program if they paid $1,500 in wages within a calendar quarter or have employed one person for any portion of a day in 20 different weeks during the calendar year. The tax rate is 6.2% on the first $7,000 of wages, but you can take a credit for the amount paid in state unemployment tax up to 5.4%, which is the maximum rate in Florida. If a business's FUTA tax liability for a quarter is $500 or less, the tax may be held over to the next quarter and added to that quarter's tax liability. Pay the tax either by the Electronic Federal Tax Payment System (required if FUTA tax liability for any quarter in 2006 is over $500) or by using form 8109, Federal Tax Deposit Coupons. Report the tax annually on federal form 940, 940-EZ or 940-PR (Spanish).

STATE

Florida Corporate Income Tax
Due: April 1 (if the business's fiscal year corresponds to the calendar year)
Corporations doing business in Florida are subject to the 5.5% tax. C-Corporations pay the tax on form F-1120. If a corporation owes more than $2,500 annually in Florida corporate income tax, it must make estimated tax payments on form F-1120ES on or before the first day of the fifth, seventh and tenth month of the taxable year and the first month of the following tax year.

If the business owes less than $2,500 in tax, shows net income of $45,000 or less and conducts all business in Florida, it may file the short form, F-1120A. Limited liability companies classified as a corporation for federal tax purposes must file a Florida corporate income tax return. Limited liability companies that are classified as partnerships for federal tax purposes are required to file a Florida Partnership Information Return (form F-1065) if they are doing business in Florida and one or more of their owners are corporations.

An S-Corporation in Florida files an F-1120 corporate income tax return for the first year it does business in the state, and answers the form's information questions. Unless there is federal taxable income at the corporate level, no state filing is required for subsequent years as long as the S-Corporation does not owe federal tax.

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