September 18, 2014

Business Basics

Taxes

If you are starting a business in Florida, you need to be aware of the taxes you may be required to collect and/or pay on both the state and federal levels.

| 4/1/2014

FEDERAL
Corporate Income Tax
C-corporations and limited liability companies classified as corporations for federal tax purposes pay income tax using federal form 1120. An S-corporation generally is not liable for federal income tax, but must file form 1120S annually and pay tax on certain investment income and capital gains.
Due: March 15 (if the business’s fiscal year corresponds to the calendar year)

Employment Taxes
(Income, Medicare and Social Security)
Businesses with employees must withhold federal income tax, Medicare tax and Social Security tax from employees’ wages. Payments must be made using the Electronic Federal Tax Payment System (EFTPS); forms 8109 and 8109-B, Federal Tax Deposit Coupons may no longer be used. EFTPS is a free service provided by the U.S. Department of Treasury. If you do not wish to use EFTPS yourself, you can arrange for your tax professional, financial institution, payroll service or other trusted third party to make payments on your behalf. Report the tax on form 941, Employer’s Quarterly Federal Tax Return.

Small employers with an employment tax liability of $1,000 or less for the year may be able to pay annually on Jan. 31 and file form 944, Employer’s Annual Federal Tax Return. Typically, the IRS notifies employers of their eligibility to file form 944; if you believe you are eligible, but have not received official notification, contact the IRS.
Due: Monthly or semiweekly (in most cases)

Unemployment Tax
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 or more people for any portion of a day in 20 different weeks during the calendar year. Payments must be made using the Electronic Federal Tax Payment System; forms 8109 and 8109-B, Federal Tax Deposit Coupons may no longer be used. Report the tax annually on federal form 940 or 940-PR (Spanish).
Due: Jan. 31, April 30, July 31, Oct. 31

STATE
Corporate Income Tax
Corporations doing business in Florida are subject to this 5.5% tax. C-corporations pay the tax on form F-1120. If your corporation owes more than $2,500 annually in Florida corporate income tax, you must make estimated tax payments on form F-1120ES on or before the last day of the fourth, sixth and ninth months of the taxable year and on the last day of the tax year. If your business has zero tax or owes less than $2,500 in tax, you may file the short form, F-1120A.

Limited liability companies classified as corporations 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. In addition, the corporate owner of an LLC that is classified as a partnership for Florida and federal income tax purposes must file a Florida corporate income tax return.

S-corporations usually do not have to file a Florida corporate income tax return unless there is federal taxable income.
Due: April 1 (if the business’s fiscal year corresponds to the calendar year)

Reemployment Tax
(formerly Florida Unemployment Tax)
Floridians are required to report wages and pay taxes to the Reemployment Assistance Program if they paid $1,500 in wages within a calendar quarter, have employed one person for any portion of a day in 20 different weeks during the calendar year or are liable for federal unemployment tax.

Taxes are paid quarterly on form UCT-6 to the Florida Department of Revenue. If all of an employer’s employees perform domestic services exclusively and the employer is eligible for an earned tax rate, the business may select an annual filing option.
Due: Jan. 31, April 30, July 31, Oct. 31

Sales and Use Tax
Florida businesses must collect sales tax for many products and services. If your business will involve taxable transactions, you must register as a sales and use tax dealer using form DR-1 or at the Florida Department of Revenue’s e-file site. Businesses pay through electronic filing or, if sales and use tax is less than $20,000 per year, on form DR-15. Returns and payments are due on the first day of the next month after the tax was collected. Payments are late after the 20th of the month. Businesses that file $1,000 or less per year, however, may file quarterly; $500 or less, file semiannually; $100 or less, file annually.
Due: First day of the month

Discretionary Surtax
Many Florida counties impose an additional discretionary surtax on transactions that are subject to the state sales and use tax. Businesses report the surtax on form DR-15 with sales and use tax.
Due: First day of the month

Use Tax on Out-of-State Purchases
When out-of-state sellers fail to collect Florida sales tax, buyers must make the payment on their own. The tax applies to items purchased out of state from Internet sites, mail order catalogs, auctions, shopping networks or toll-free shopping services. It also is imposed on items purchased during out-of-state travel when the merchandise is shipped to a location in Florida. Use form DR-15MO to make payment.
Due: First day of the month after the quarter in which purchase was made

Tangible Personal Property Tax
Businesses that own tangible personal property (equipment, furniture, computers, etc.) used for commercial purposes that is not included in the assessed value of the real property must pay an annual tax. Business inventory is not taxed. The tax is paid on form DR-405 to the county property appraiser.
Due: April 1

Tags: Florida Small Business, Business Basics

Florida Business News

Florida Trend Video Pick -

An ultra-low-cost college degree
An ultra-low-cost college degree

At the online University of the People, anyone with a high school diploma can take classes toward a degree in business administration or computer science — without standard tuition fees.

Earlier Videos | Viewpoints@FloridaTrend

Ballot Box

Do you leave a tip in your hotel room for the maid?

  • Yes
  • No

See Results

Ballot Box
Subscribe