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Taxes
Learn the basics of federal and state taxation.
» Florida Unemployment Tax
Due: January 31, April 30, July 31, October 31
Floridians are required to report wages and pay taxes to the Unemployment Compensation 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 (FUTA).
The initial tax rate for new employers is 2.7% for the first 10 calendar quarters (or in some cases 11 quarters), at which time the business will receive a computed tax rate. The maximum tax rate allowed by law is 5.4%. Unemployment taxes must be paid on the first $7,000 of wages paid to each employee per year.
Taxes are paid quarterly on form UCT-6 to the Florida Department of Revenue. Businesses that pay taxes on 10 employees or more in any calendar quarter must use e-filing.
» Florida Sales and Use Tax
Due: First day of the month
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 (form DR-1). Most businesses pay monthly on form DR-15, with returns and payments 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. If a business files $500 or less, it may file annually. Businesses that pay $20,000 annually in sales and use tax are required to file electronically at myflorida.com/dor.
» Florida Discretionary Surtax (Local Option)
Due: First day of the month
Many Florida counties impose an additional discretionary sales 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. These local option taxes range from 0.25% to 1.5%. New rates become effective on January 1 each year, but expiration dates vary. In 2008, 60 of Florida’s 67 counties impose sales surtaxes.
» Use Tax on Out-of-State Purchases
Due: First day of the month after the quarter in which purchase was made
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 is also imposed on items purchased during out-of-state travel when the merchandise is shipped to the individual’s home or business’s location in Florida. Form DR-15MO is used to make payment.
» Florida Tangible Personal Property Tax
Due: April 1
Florida businesses that own tangible personal property (equipment, furniture, computers, etc.) 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.
What’s New in 2008
• Mileage
The business mileage rate as of Jan. 1, 2008, is 50.5 cents per mile. That’s up from 48.5 cents per mile in 2007.
• Expensing
Businesses may expense up to $125,000 of new or used depreciable, tangible personal property using the section 179 deduction. (That figure is up from $112,000 in 2007.) If the business spends more than $500,000 on section 179 property, the amount of the deduction is reduced by $1 for every $1 over $500,000. Check IRS Publication 946, How to Depreciate Property, for more details.
• Self-Employment
The self-employment tax rate on net earnings remains the same for 2008. The 15.3% rate is a combination of 12.4% for Social Security and 2.9% for Medicare. The maximum amount of the Social Security part of the tax in 2008 has increased to $102,000 (up from $97,500 in 2007).
• Social Security and Medicare
The employer and employee will each continue to pay 6.2% for the Social Security tax and 1.45% for Medicare. The maximum amount of the Social Security part of the tax in 2008 has increased to $102,000 (up from $97,500 in 2007).
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