Plan It: 7 steps to setting up your business

STEP 6

Know Your Tax Liabilities

Florida Taxes

Corporate Income Tax Corporations are subject to a 5.5% tax and must file a return annually even if no tax is due. C-corporations pay the tax on Form F-1120.

Limited liability companies classified as corporations for federal income tax purposes must file a Florida corporate income tax return; limited liability companies classified as partnerships must file a Florida Partnership Information Return (Form F-1065) if they are doing business in Florida and one or more of their owners are a corporation. Also required to file: the corporate owner of an LLC that is classified as a partnership for Florida and federal income tax purposes.

S-corporations usually do not have to file a Florida corporate income tax return unless there is federal taxable income.

Reemployment Tax Required of Floridians who paid at least $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.

Sales and Use Tax Businesses engaged in taxable transactions must register using Form DR-1 or at the Florida Department of Revenue’s e-file site. File electronically or, if the tax is less than $20,000 per year, on Form DR-15. Businesses having $1,000 or less per year to report may file quarterly; $500 or less, semiannually; $100 or less, annually.

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 using Form DR-15MO. Applies to items purchased out of state from Internet sites, mail order catalogs, auctions, shopping networks or toll-free shopping services, and to items physically purchased out of state when the merchandise is shipped to a Florida address.

Tangible Personal Property Tax An annual tax on personal property used for commercial purposes that is not included in the assessed value of the real property, excluding business inventory and state-registered vehicles; paid on Form DR-405 to the county property appraiser. All new businesses must file their first year; thereafter, no additional filing is required if the amount of tangible property is less than $25,000.

Federal Taxes

Personal Income Tax For sole proprietorships and partnerships, profits and losses from the business are typically passed through to the owners and reported on their individual income tax returns. Under the American Tax Cuts and Jobs Act passed in December 2017, this practice will continue. In addition, some small business owners may qualify for a new 20% pass-through deduction, but since IRS and Treasury guidance on this matter is not likely to come before summer, tax experts recommend simply filing estimates as usual to avoid penalties, figuring the total of quarterly payments to match 100% of what you owed last year (110% if you expect to make more than $150,000). For more detailed information, consult a tax professional.

Self-Employment Tax All net profits derived from doing business as either a sole proprietorship or partnership with no employees are subject to federal self-employment tax, which is equivalent to the Medicare and Social Security taxes employers withhold from their employees’ paychecks.

Tags: Florida Small Business, Business Basics, The Game Plan