This section tackles some of the less-than-enjoyable aspects of business ownership: taxes, recordkeeping and employment issues. If you choose to handle these tasks yourself — or even if you outsource them to others — being familiar with the basics will help you stay ahead of regulations and be a more effective manager.

Labor Law

Federal Labor Laws

Employment Eligibility Verification Within three days of being hired, each new employee must complete Form I-9 from the Department of Homeland Security, U.S. Citizenship and Immigration Services, to verify his/her identity and eligibility to work in the United States. Download the form, instructions and a list of acceptable documents at www.uscis.gov.

The Fair Labor Standards Act applies to nearly all businesses in the U.S. and requires companies to pay at least the federal minimum wage ($7.25 per hour) and overtime pay of not less than one-and-one-half times the regular pay rate after 40 hours of work per week; prohibits persons under age 18 from working in certain jobs; and establishes the hours/times employees under age 16 may work. Some employees are exempt from one or more of the major requirements; consult the U.S. Department of Labor (www.dol.gov) for details.

Occupational Safety and Health laws require businesses to provide a safe workplace and, in many cases, to maintain records of job-related injuries and illnesses. Employers with 10 or fewer employees are exempt from most requirements, as are industries classified as low-hazard. Fines and penalties may be levied for non-compliance. Details are available from the U.S. Occupational Safety and Health Administration at www.osha.gov.

The Americans with Disabilities Act prohibits employment discrimination against qualified individuals with disabilities and requires that public accommodations and commercial facilities be designed to comply with specified accessibility standards. All businesses offering access to customers and/or employing 15 or more workers must abide by ADA rules. Visit www.ada.gov for details and to get a copy of the “ADA Guide for Small Businesses.”

Family and Medical Leave Businesses employing 50 or more must give certain employees up to 12 weeks of unpaid, job-protected leave per year (26 weeks for qualifying military caregivers) while preserving their health benefits during the period. Employees may take leave for the birth of a child; if they adopt a child or provide foster care; to care for a seriously ill spouse, child or parent; or if they personally suffer a serious health condition.

The U.S. Equal Employment Opportunity Commission enforces federal employment discrimination laws that protect civil rights and prohibit age discrimination.

The Equal Pay Act applies to virtually all employers and prohibits wage discrimination between men and women performing substantially equal work within the same workplace.

The Affordable Care Act specifies that all employers who provide self-insured health coverage to their employees must file an annual return with the IRS detailing certain information for each employee they cover. Employers with fewer than 25 full-time employees may be eligible for a Small Business Health Care Tax Credit to help cover the cost of providing coverage; those with 50 or fewer employees may be eligible to purchase coverage through the Small Business Health Options Program. Employers with 50 or more full-time employees must report if and what health insurance they offered employees and are subject to Employee Shared Responsibility provisions. Learn more about reporting requirements and eligibility for tax credits at www.healthcare.gov or www.irs.gov/Affordable-Care-Act/Employers.

State Labor Laws

New Hires Employers are required to complete a New Hire Reporting Form for every newly hired or rehired employee, full- or part-time, within 20 days.

Minimum Wage The 2016 Florida minimum wage is $8.05 per hour; tipped employees who meet the eligibility requirements of the federal Fair Labor Standards Act receive $5.03 per hour in addition to tips.

Workers’ Compensation Employers with four or more employees (full- or part-time) must carry workers’ compensation coverage for their employees. Different requirements apply for construction and agriculture.

Child Labor Workers under the age of 18 cannot work in hazardous occupations such as excavation, electrical work, roofing, mining, operating heavy machinery or moving vehicles, or around explosives, toxic or radioactive substances or dangerous equipment. Additional occupations are banned for children ages 14 and 15. Minors cannot work during school hours without an exemption.

Background Checks Private citizens or companies may request a state-only criminal history record check of an individual through the Florida Department of Law Enforcement website for a fee of $24 per case.

How to Get Your Free EIN

Before tackling the nitty-gritty details of which taxes impact your business, you should determine if you need to apply for an Employer Identification Number (EIN). For the answer, go to www.irs.gov/businesses/small and click on the “Employer ID Numbers” link. If you are operating as a sole proprietor and do not intend to have employees, your Social Security number will suffice; otherwise, you will need an EIN. Applying for an EIN is a free service offered by the IRS; avoid websites that want to charge.

Records and Accounting

Tracking the Numbers

Although you’ll probably want to hire an accountant to prepare your tax returns and important financial documents such as those required for commercial loan applications, you can easily keep simple business records yourself using a prepackaged manual or computerized business bookkeeping system, such as QuickBooks or Wave. At a minimum, you’ll need to keep account of gross receipts, purchases, expenses, assets and payroll.

Just be sure that whatever bookkeeping system you choose allows you to easily monitor cash flow. Accurate cash-flow statements and projections can help you control spending, determine your break-even point and make realistic plans for future expansions of inventory, facilities and staff.

Taxes

Federal Taxes

Personal Income Tax For sole proprietorships and partnerships, the profits and losses from the business are passed through to the owners and reported on their individual income tax returns. Sole proprietors report their business revenues and expenses on Schedule C, then transfer the net profit/loss to their Form 1040. Partners report their individual shares of the business revenues and expenses on Schedule E, then transfer the income/loss to their Form 1040. The partnership itself also must file Form 1065 and issue a Schedule K-1 to each partner.
Due: April 15. Quarterly estimates due: April 15, June 15, Sept. 15, Jan. 15

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 that employers withhold from their employees’ paychecks. Use Schedule SE to determine the amount owed, then transfer the figure to your personal income tax Form 1040.
Due: April 15

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 Businesses with employees must withhold federal income, Medicare and Social Security taxes from employees’ wages. Payments are made using the Electronic Federal Tax Payment System. 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. You may file Form 944 instead of quarterly forms only if you have been notified, in writing, by the IRS to do so. If you believe you are eligible and have not received official notification, contact the IRS.
Due: Monthly or semiweekly (in most cases)

Unemployment Tax Florida businesses are required to report wages and pay taxes to the Federal Unemployment Compensation program if they paid $1,500 or more in wages within a calendar quarter or have employed one or more people for any portion of a day in 20 or more different weeks during the calendar year. Use the Electronic Federal Tax Payment System and report the tax annually on federal Form 940.
Due: April 30, July 31, Oct. 31, Jan. 31

Florida Taxes

Corporate Income Tax Corporations are subject to this 5.5% tax and must file a return annually even if no tax is due. C-corporations pay the tax on Form F-1120.
Due: If your corporation owes more than $2,500 annually in Florida corporate tax, you must make estimated tax payments on or before the last day of the fourth, sixth and ninth months and on the last day of the taxable year.

Reemployment Tax Floridians are required to report wages and pay taxes to the Reemployment Assistance Program if they 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. File Form RT-6 and pay to the Florida Department of Revenue.
Due: April 30, July 31, Oct. 31, Jan. 31

Sales and Use Tax If your business will involve taxable transactions, you must register 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. Businesses that have $1,000 or less per year to report may file quarterly; $500 or less, semiannually; $100 or less, annually.
Note: Your county may impose an additional tax on transactions that are subject to the state sales and use tax. Report this surtax on Form DR-15 along 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 out of state 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 An annual tax on personal property used for commercial purposes that is not included in the assessed value of the real property. Business inventory and state-registered vehicles are not taxed. The tax is 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.
Due: April 1