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Corporations and Partnerships Deadlines and Penalties

A pass-through entity is an entity that is taxed at the member level. Partnership’s Partners and an S Corp’s Shareholders. A Florida Corporation can be a pass-through entity like a partnership if it elects to be an S Corp. A single or multi-member LLC can be an S Corp, with a Corporate Election and simultaneous S Election. Two or more member LLCs are automatically a partnership for tax filings and an S Election is redundant as the Partnership effectively acts in the same way for tax purposes.

Corporations and S Corps were required to file by March 15th this year. The IRS changed the filing deadline for Partnerships to March 15th to enable the partners to have time to receive the K-1’s generated from the partnership to enable them to file timely by April 15th. The filing deadline for Corporations was pushed off till April 15th, with S Corps remaining with the March 15th deadline.

The State of Florida does not require income tax filings for passthrough entities, as there is no Florida Personal Income Tax. However, there is Florida Corporate Tax. A Corporation must be an S Corp to avoid Florida Corporate tax. Florida Corporations will need to file form F 1120 by May 1, 2020. IRS form 1120 must be filed by April 15th. The State of Florida Continues to enforce timely filing of corporate tax as this is one of the few forms of taxation in Florida. Corporations need to be sure to file extensions on May 1, 2020, if additional time is required to file.

Corporations generally are not penalized by IRS if there is no taxable income, however, S Corps and Partnerships can have a penalty assessment based on the number of members and days the tax return is filed late. Those penalties are quite substantial, and therefore, our firm reached out to taxpayers early in the season to ensure that extensions were filed to avoid this, in case the taxpayer was not yet prepared to file.

The extension is only effective for a six month period. If an extension is filed and received the taxpayer is generally guaranteed of non-assessment of penalty if the tax return is filing within the six month extension period. I always advise taxpayers to send tax returns by certified mail with receipt of mailing. It is the responsibility of the tax payer to insure receipt. Taxpayers should always request proof from the tax preparer of e-filed and accepted returns as proof of filing.

Let us know if you have any questions.

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The Beach House Company Copy

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The Beach House Company

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Readings From the Northside

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Good Grief Tenerife! Overcoming Outdated Preconceptions

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A Day in the Life at Danai Beach Resort

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Ocean Home Magazine | For the Luxury Coastal Lifestyle Magazine

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Sundial Beach Resort & Spa Sanibel Island, Florida

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Favorite Beach Captions For Instagram: 100+ Beach Sayings

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Find your dream destination where you can stay salty…

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5 Unmissable Experiences in Mauritius for Luxe Junkies

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Florida S Corporation Tax Return

Florida S Corporation Tax Return

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If you are operating an S corporation or an inactive shareholder of such type of corporation, then you have to be aware of the different tax returns that you might face when managing your business or company. This type of taxable income in Florida ranges from federal unemployment tax to federal payroll taxes. Shareholders of any S corporations in Florida are subjected to complete the federal personal income tax, and most of them can even qualify for an income tax for net investment. Generally, when you are in the StateState of Florida, both the S corporations, as well as its shareholders, are exempted from any state income taxes. However, the S corporation can still be required to pay exercise tax and state sales tax. 

Do Dos and S Corp have to file a Florida tax return?

Florida S corporations, just like any S corporations that operate in the United States, are not required to pay federal corporate tax, simply because they are considered as flow-through entities. But, varying on the line and structure of the business, there is a possibility that an S corporation might be subjected to any of these taxes based on Tax Florida:

Payroll taxes

Payroll taxes are made of Social Security and Medicare taxes. They were introduced by the FICA Act, and usually, they are equal to approximately 15.3% of the income of an employee. The S corporation needs to take around 50% of this amount from their employee’s salary and contribute the remaining 50%. Employees are of course, required to pay income tax for salaries, commisions, and other additional income.

FUTA tax

Federal Unemployment Tax Act or FUTA tax is given to corporations that shell out a minimum of $1, 500 on salary or accept at least one worker as part of a day for 20 weeks or more in several quarters. For example, an S corporation employs farmworkers, and they spend $20, 000 as wages for their farmworkers in every quarter or employ ten workers every day for 20 weeks in every quarter, they are qualified to pay the FUTA tax. The tax return for this specific tax is around 6% of the salary. However, the S corporations can collect deductions for any amount it has given to a Florida unemployment fund.

Personal Income tax

S corporation shareholders in Florida are eligible to complete an income tax since they have an income from their share in the corporation. These shareholders need to pay income tax even though their income was not given in a particular year. There are different rates for a personal income tax, and ownership of shares, but commonly, they range from 10% – 37%, varying on the earnings of the shareholder.

Net investment tax

Even those shareholders that are not particularly active but still receive an income of at least $200, 000 independently, or a minimum of $250, 000 for couples who file as one, are eligible to a Net Investment Income Tax. 

Does Florida have an S corporation return?

Florida S corporations that have recently filed for an S corporation treatment is subjected to record an informational portion of the F-1120, which is the corporate income/franchise tax return in Florida during the first year. For the following years, the S corporation doesn’t have to file any tax return anymore. Moreover, Florida S corporations aren’t subjected to settle the 5.5% corporate tax that is an impost on C corporations. However, there are several uncommon circumstances that would put any S corporations in Florida in a state where they need to file for tax returns. For instance, this could occur during the case when the corporation owns a taxable income. These scenarios take place when one of these happen:

The corporation earned something out of Schedule D of Form the 1120s.

The corporation utilized the LIFO strategy for measuring its inventory prior to filing for an S corporation treatment. They are then responsible for recapture.

The corporation has existing shareholders with excess net passive income. 

Take note that Florida doesn’t impost personal income taxes to shareholders of an S corporation. The State of Florida is one of the few states in the United States that doesn’t levy any form of income tax to shareholders of S corporations as a whole. With this advantage, S corporation has become one of the most sought after type of entity for small-time business owners that operate in Florida. 

Does a foreign corporation need to file a Florida tax return?

Foreign S corporations that do their business in Florida need to file tax florida returns, just like how a Florida S corporation is subjected to pay taxes in other states or federal income tax. It is highly suggested that these foreign corporations talk with their tax lawyers in Florida to prevent unforeseen circumstances. 

Do S corporations need to file state taxes?

States have various methods when it comes to taxing S corporations. Some treat corporations in a similar way they would do with an IRS and only levy them with income tax. However, there are other states that aside from requiring Florida corporate income tax to the shareholders, they also tax the S corporation, as a whole. The fees are typically deducted on the earnings that the corporation has made from the StateState.

Apart from the charges for business licenses and permits, S corporations that operate in Florida also need to settle these taxes:

Excise and State Sales Taxes – S corporations that correctly distribute services or goods are required to pay their state sales taxes. On the other hand, S corporations that are involved in the manufacturing industry are subjected to settle their excise taxes.

Unemployment and Worker’s Compensation Insurance – these are the types of taxes that are mandatory requirements in the majority of states in the US, especially in Florida. Provided that the S corporation has employees and workers, it is subjected to pay for unemployment and worker’s compensation insurance.

Franchise Tax – several states in the US, including Florida, require the S corporations that operate within the StateState to settle their gross-receipts tax or annual franchise taxes. Some states give corporate tax to S corporations.

Personal Income Tax – S corporation shareholders might be eligible to pay for personal income tax. Basically, personal income tax for shareholders of S corporations differ from each State and might depend according to the location of the company in the StateState. Technically speaking, persona income taxes can reach as much as 13.3% in several states. 

S corporations are not subjected to pay for federal corporate tax and many other taxes that are given to C corporations. S corporations need to deduct and forward the payroll taxes in case they have workers. In most states, S corporations are also eligible to pay a franchise tax every year. The S corporation shareholders might also pay state and federal income taxes at a price that is comparable to taxpayers that belong to many different entities. 

All in all, S corporations in Florida are not subjected to pay any federal corporate tax. However, they might qualify to pay FUTA and FICA taxes. Shareholders of Florida S corporations are also subjected to settle their federal personal income taxes. Inactive yet high-earning shareholders might be eligible to pay for net investment income tax. The thing about Florida is it is a state that is not quite strict when it comes to S corporations and their charges. As a matter of fact, they don’t require these kinds of corporations to pay Florida corporate income tax.

If you need guidance in dealing with your S corporation taxes, make sure you ask help from a reliable and knowledgeable professional tax lawyer. He/she knows the ins and outs of taxes that concern S corporations. If you want to avoid surprises or problems when operating your business in Florida, then the assistance from an expert tax lawyer is highly advised. 

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Florida Reemployment Tax

Florida Reemployment Tax

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Reemployment Tax as it is known in Florida refers to the State Unemployment Tax Act or SUTA. In some states, it is also known as the State Unemployment Insurance or SUI. The State Unemployment Tax is a payroll tax pay on behalf of their employees to the state unemployment fund. In some states, both the employer and the employee pay SUTA taxes, which are contributions to provide monetary support to displaced workers. The SUTA is collected alongside the federal unemployment tax. 

Every state sets its SUTA tax rate and the base taxable wage which determines how much of each employee’s wages are subject to tax. While some states have their range of state unemployment tax rates, employers get a tax rate or assessment that they are mandated to pay. The tax rate is updated periodically. Businesses in certain industries may be charged higher tax rates, especially those that regularly experience high turnover rates. Every state has the freedom to change their SUTA, SUI, or Reemployment tax annually.

Florida Reemployment Tax

The Reemployment tax in the state of Florida is paid solely by employers. The collected taxes are deposited into the Unemployment Compensation Trust Fund only to pay reemployment assistance benefits to claimants who meet the eligibility requirements. The first $7,000 of employee’s wages paid by the employer in one calendar year is subject to reemployment tax. Employers who have stable employment records may receive reduced tax rates after passing a qualifying period.  The reemployment tax has been administered by the Florida Department of Revenue beginning 2000.

In 2012, the State of Florida passed legislation changing the Florida’s Unemployment Compensation Law to the Reemployment Assistance Program Law. The aim of the program was redirected to help job seekers in the state become reemployed. 

Florida’s reemployment benefits are administered by the Florida Department of Economic Opportunity. The department provides temporary income to workers who lost their jobs through no fault of their own and who are able and available for work.

Florida Reemployment Tax Rate

The Florida Department of Revenue announced on December 1, 2018, the reemployment tax rates for excise tax purposes for the year 2019. The minimum tax rate for 2019 is still 0.1 percent, which is the equivalent of $7.00 per employee. The minimum tax rate is the same as the rates for 2017 and 2018. The reemployment tax rate applies to the first $7,000 of an employee’s annual wages. The maximum rate of 5.4 for 2017 and 2018 remains the same for 2019.  

To make employers and employees aware of the tax rate for the year 2019, the Florida Department of Revenue mailed a letter to all employers to announce the new tax rate.

Important Information for Employers About Florida’s Reemployment Tax

Reemployment assistance provides partial and temporary income to workers who lost their jobs through no fault of their own, and are able and available for work. The purpose of the assistance is to help jobless workers, their families, and the business community. 

The reemployment assistance also aims to prevent displaced workers and their families from becoming a burden of the state and the community. Without reemployment assistance, these workers and their families may be forced to seek the help of their neighbors and other members of the community.

The fund for the reemployment assistance is paid for by the employers within the state through the reemployment tax that is managed by the Florida Department of Revenue. The tax paid is one of the costs of operating a business in the state.  Workers are not required to pay reemployment tax and should not be required by players to do so through payroll deductions. Businesses charge the cost of the reemployment tax to their customers through the price they pay for the goods or services that the business sell. This means that the burden of reemployment benefits to displaced workers is shared by everybody in the state. The payments made by employers go into a fund from where the money is paid to eligible claimants. There is a qualifying period after which an employer with a stable employment history can be eligible for a lower tax rate.

Liability for Reemployment Tax

A new business in Florida must report its first hiring of employees in the month that follows the calendar quarter in which the employment begins. A business can register for filing reports and paying taxes through the website of the Florida Department of Revenue. The website will guide an employer through an application interview that will determine his tax obligation. Employers with no internet access may complete a Florida Business Tax Application Form DR-1.

Company owners who meet any of the following conditions are liable to pay the Florida Reemployment Tax:

a quarterly payroll of $1,600 or more in a calendar year;

one or more employees for a day during any 20 weeks within a calendar year;

an agricultural employer with five or more workers for a day during any 20 weeks within a calendar year, or a cash payroll of $10,000 or more in any quarter of a calendar year;

a domestic employer whose cash payroll totals $1,000 or more in a quarter of a calendar year;

purchased a part or the whole of business that is liable to pay tax, or whose combination of the existing payroll or number of employees and that of the business you purchased meets the liability criteria;

a nonprofit organization as defined in the pertinent sections of the Federal Unemployment Tax Act and of the Internal Revenue Code and have four or more employees for a day during any 20 weeks within a calendar year;

The employer is a state, country, or city, governmental unit; or

a tribal unit or an Indian tribe.

Voluntary Coverage

A business owner who is not eligible for a reemployment tax can choose to voluntarily give reemployment coverage for his workers. An employer may apply for voluntary coverage by completing and submitting the voluntary Election to Become an Employer Under the Florida Reemployment Assistance Program Law, which is available on the website of the Florida Department of Revenue.

When an employer who is not required to pay the reemployment tax voluntarily chooses to provide reemployment coverage for his workers, his workers become eligible to claim assistance if they lose their job through no fault of their own. 

Florida Unemployment Benefits

The unemployment benefits of Florida workers are administered by the Reemployment Assistance Program through the Florida Department of Economic Opportunity.  The emphasis of the program is job search and reemployment services offered by the agency.

Florida’s Reemployment Assistance Program grants partial but temporary wage replacement for eligible workers who lost their jobs through no fault of their own, which helps stabilize the state’s economy for business owners who rely on consumer spending. The program is funded by an employer through the collection of taxes and is provided at no cost to workers who receive benefits.

The maximum benefit a displaced worker can earn is $275 per week. The maximum time for collecting unemployment benefits in Florida is capped at 26 weeks. An employee must have earned a minimum of $3,400 in the base period of his Florida unemployment claim and his highest quarter wages cannot be more than 1.5 times the entire base period wages. 

It takes about three to four weeks before a displaced worker receives his first payment. He can receive benefits between 12 and 23 weeks based on the current unemployment rate in the state.

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Florida Corporate Income Tax

Florida Corporate Income Tax

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The majority of sales tax for certain kinds of business income is taken from the state. As part of the regulation, the information on how earnings from a particular business are taxed vary according to the legal form of the business. Most state corporations are required to have a corporate income tax while earning generated from entities like partnerships, S corporations, limited liability companies/LLCs, and sole proprietorship are required to have personal income tax under the state. Tax rates for personal income and corporate income tax differ from state to state. However, corporate rates are usually flat, no matter how much income is generated from the business. Generally, income tax can range from 4% to 10%.

Moreover, since Florida doesn’t impose tax on the personal income of each individual because it doesn’t have personal income tax, corporate income tax is a crucial source of income that helps the state. Businesses that are incorporated are required by the law to finish a tax return to make up for the corporate tax subjected to the income of the business. However, both corporations and individuals need to keep in mind that there are also other forms of taxes that are gathered by the state. 

Presently, there are only six states that don’t have any corporate income tax, namely South Dakota, Nevada, Ohio, Texas, Wyoming, and Washington. The rest of the states have an existing corporate income tax for different businesses and companies, and these include Florida. All corporation that is generally registered in Florida needs to settle a corporate income tax return, even though they are not liable to pay any of these taxes. However, there are particular individuals and kinds of businesses that don’t necessarily have to settle a tax return, most especially if they are not part of a corporation. These include:

Individuals

Sole Proprietors

S Corporations – might be subjected to complete tax at a federal level

Does Florida have a corporate income tax?

Florida, just like the majority of the states, has a corporate income tax. The Florida state government utilizes a cutting edge CIT website to support quick and efficient corporate income tax return filing. There are various types of tax returns that can be filed on the web, and one can also pay for it online. These include:

F-11204A, Florida Corporate Short Form Income Tax Return

F-7004, Florida Corporate Extension of Time

F-1120ES, Florida Corporate Estimated Tax Payment

Moreover, the F-1120, Florida Corporate Long Form Income Tax Return can be filed and paid online, but you are required to use specific, specialized software. This is accessible at the Florida Department of Revenue.

Small business corporations that operate within Florida can file their F-11204A, Florida Corporate Short Form Income Tax Return online. However, there are particular requirements that have to be met by these corporations. To qualify, they have to submit the complete name of their corporation, proven address, registration numbers, and Florida contact number. Apart from this, they also need to submit their corporate income tax records as additional to the information on their registered bank details. Other pieces of evidence that should be proven by the corporations include:

They have a net income that is not more than $45, 000

They operate within the state of Florida, and not somewhere else

They have zero tax credits but exempted to Estimated Tax Payments or Tentative Tax Payments

They do not have any federal Alternative Minimum Tax

The corporation hasn’t filed or been a part of any kinds of tax returns

On another note, Florida corporate income tax is taxed using either of these two strategies: 3.3% alternative minimum tax (AMT) or 5.5% state tax on federal taxable income. The 3.3% tax that is aligned with the AMT strategy is applicable once you have considered the total amount of any reduce exemption or federal exemption as declared on the federal income tax return of the corporation. Florida corporations are required to utilize any of the strategies mentioned above, as long as it yields the greatest tax for the corporation. No matter what strategy is suitable in your situation, $50, 00 net income is exempted – this has been the standard amount ever since the beginning, but it could still change. Moreover, the payment for corporation income tax rate in Florida is set on the 1st of May, if the tax year of the corporation is similar to the calendar year. If not, the corporate income tax return is due on the first day of the fifth month once the corporation’s tax year is close.

Does a Florida LLC file a tax return?

Florida has specialized rules and regulations for LLCs. In case a corporation is part of a multi-member LLC, otherwise known as a partnership for state and federal tax purposes. The LLC is required to file the Florida Form F-1065 while the corporation is subjected to file a Florida corporate income tax return. With regards to this, if a certain corporation indirectly or directly owns one member of the LLC known as a disregarded entity specifically for federal tax purposes, then the corporation is subjected to file the Florida F-1120 stating both the earnings of the single-member LLC and its personal earnings.

Regular LLCs are typically pass-through entities that aren’t subjected to any income tax to either the State of Florida or the federal government. Instead, the earnings from the business are equally given to independent LLC members, which pay their federal taxes according to the amount of income given to them. Since it is given that Florida doesn’t have a personal income tax, standard Florida LLC members aren’t subjected to pay any tax to the state using their earnings from the LLC. As aforementioned, multi-member LLCs known as partnerships for tax reasons that own a corporation as a member, as well as single-member LLCs recognized as disregarded entities that are indirectly or directly belongs to a corporation, are required to specialized state filing requirements. 

Furthermore, even if LLCs are considered as disregarded entities or partnerships by default due to Florida taxes, you still have the freedom to select whether or not you want your LLC to be recognized as a corporation. About this, the LLC is required to have the Florida corporate income tax. Consider this example:

For the current tax year, a certain multi-member LCC that has a default tax recognition of the partnership doesn’t have any corporation member, and it had a $100, 000 net income. This amount of net income will be distributed between you and the other members of the LLC, and each of you will have your respective federal income tax returns paid. This is because all of you are required to. However, take note that you don’t owe your Florida tax returns any tax from this money.

For more information about corporate income tax or taxes in Florida in general, you can contact or check out the Florida Department of Revenue. 

Does a foreign corporation need to file taxes in Florida ?

People from different parts of the world form LLCs and corporations, even if they operate their business from their home country or state. However, what will you do if you own a company that’s operating within the premises of Florida as a foreign corporation?

If you are managing a corporation in Florida, basically, your corporation will be recognized as a foreign corporation that operates in Florida. Individuals typically form a corporation and then sign up as a foreign entity – or the same business – in Florida. This particular procedure is known as Foreign Qualification. This is a procedure where Florida gives you their permission that allows you to do your business in their state. It is an essential step that usually gets ignored by many individuals; however, if you fail to meet the local compliance regulations in Florida, you and your company might be in a lot of trouble.

The Florida corporate income or franchise tax is subjected to all corporations for the permission of doing business, generating income, or operating in Florida. All corporations or companies that are federally taxed as corporations are required to pay their taxes, even out-of-state or foreign corporations.

The corporate income tax rate varies and some companies are required to pay additional Florida sales tax and corporate income tax rate depending on their estimated income.

What is the federal income tax rate in Florida?

There are currently seven federal tax brackets, namely. 37%, 35%, 32%, 24%, 22%, 12%, and 10%. This bracket varies according to the filing status and taxable income of an individual. To find out more about the federal income tax rate, here’s a detailed guide based on the Florida department of revenue:

For single filers in Florida:

Tax rate of 10% and taxable bracket of $0 – $9,700 results to 10% of taxable income.

Tax rate of 12% and taxable bracket of $9,701 – $39,475 results to a taxable income of $970 plus 12% of the amount more than $9,700

Tax rate of 22% and taxable bracket of $39, 476 – $84,200 results to a taxable income of $4,543 plus 22% of the amount more than $39, 475

Tax rate of 24% and taxable income bracket of $84,201 – $160, 725 results to a taxable income of $14, 382.50 plus 24% of the amount more than $84, 200

Tax rate of 32% and taxable income bracket of $160, 726 – $204, 100 results to a taxable income of $32, 748.50 plus 32% of the amount more than $160, 725

Tax rate of 35% and taxable income bracket of $204, 101 – $510, 300 results to a taxable income of $46, 628.50 plus 35% of the amount more than $204, 1000

Tax rate of 37% and taxable income bracket of $510, 301 or more results to a taxable income of $153, 798.50 plus 37% of the amount more than $510, 301

For Married, filing together in Florida

Tax rate of 10% and taxable bracket of $0-$19, 400 results to a 10 % taxable income

Tax rate of 12% and taxable bracket of $19,401 – $78,950 results to a taxable income of $1,940 plus 12% of the amount more than $19,400

Tax rate of 22% and taxable income bracket of $78, 951 – $168, 400 results to a taxable income of $9, 086 plus 22% of the amount more than $78, 950

Tax rate of 24% and taxable income bracket of $168,401 – $321,450 results to a taxable income of $28, 765 plus 24% of the amount more than $168, 400

Tax rate of 32% and income taxes bracket of $321,451 – $408, 200 results to a taxable income of $65, 497 plus 32% of the amount more than $321,450

Tax rate of 35% and taxable bracket of $408,201 – $612, 350 results to a taxable income of $93, 257 plus 35% of the amount more than $408,200

Tax rate of 37% and income taxes bracket of $612, 351 or more results to a taxable income of $164, 709.50 plus 37% of the amount more than $612, 350

Sales tax Florida as well as franchise tax values are not fixed. It is a requirement that businesses or a company pay franchise tax and pay federal income taxes every January.

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Florida business tax application

Florida business tax application

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Are you interested in starting a new business? New business owners and entrepreneurs who have recently moved from doing a side-project to a real-deal business might need to know more about business tax application in their specific location. For you to go on a full-time operation and make enough money, you have to consider the legalities of running a business. Among various US states and county, Florida has one of the most straightforward processes to help new owners establish their business and succeed in their endeavors.

When it comes to staying motivated for business growth, there are plenty of inspirations that owners look out for. But as your business grows, you have to expect it to be more complicated. There will be more significant risks to take, bigger fees to pay, more substantial liabilities, and even more complexities for people involved. On the other hand, once you’ve complied with all the is required for your business to be registered and established, everything can be extra rewarding and incredibly exciting. So here is a little information on how to go about business registration and tax application in Florida.

How to Register A Business in Florida

All businesses and organizations in Florida should be registered by filing their official documents at the Secretary of State or check the Florida Department of Revenue. For companies registering as LLCs, they need to provide their “Articles of Organization,” while for corporations, they need to provide the “Certificate of Incorporation.” These documents are essential in detailing the legal facets of the business activities.

Likewise, businesses should also provide valuable information about their organization. These include the details and address of the key persons involved in the market. Each business entity should have a list of the owner, managers, members, and others.

Some people do not understand the necessity of registering their new business or company and having licenses in their location. A company that is recorded will fulfill the minimum requirements for you to establish your business legally and tax registration. If you run your business without any certificate or registration, you run the risk of being penalized and payment of significant fees. Because of the gravity of the offense, you may also consult with online business registration services for you to properly register your business. They can help you operate legally in your locality. On the other hand, you must also check whether the IRS and the courts recognize them. It will prevent any tax and legal liabilities that come with your assets.

How Do I Register for Sales Tax in Florida?

After successfully registering your business, you can proceed to have your required sales tax permit. There are two ways for you to register for a sales tax permit. You can do this through the paper application or an online website. It is easier to submit your request through the online site as it is processed faster, and the confirmation is automatically sent upon submission. This confirmation will be your ticket in case your application is delayed. You can visit the site: https://floridarevenue.com/taxes/eservices/Pages/registration.aspx if you are interested in making an online application for your sales tax permit. They have all you need to know to open an account, fee, taxable leins and county specific licenses.

Additionally, you need to provide the following information for sales tax registration:

Business entity structure

Owner Information

NAICS number

Federal tax ID

Start date of the business in Florida

How Much is Business Tax in Florida?

Florida has a lot of perks for prospective small business owners and entity. When you compare the processes with other location, the regulations in this county are minimal. Likewise, Florida business tax application has lesser fee and requirements or barriers for new businesses to enter the market quickly. Gradually, the state’s labor force is growing despite no growth at the national levels. Apart from great weather and abundant sunshine all day long, the state does not impose state income taxes for small small business. For corporate ones, the state imposes low tax rates compared with other similar states. The federal income tax here is pegged at 5.5%, but they also have exemptions to lower the prices significantly. A business registered as a corporation needs to pay a higher amount of the standard rate less the exemptions, credits, and another tax rate of 3.3%.

How do I get a tax ID number in Florida?

For your various business activities like if you need hire staff to man your business in Florida, you should have a Sales Tax ID Number from the Florida Department of Revenue. Each employee will need your business state EIN or employer identification when they are hired. Companies that will have goods or services also need a sales tax ID. It is easy to get your tax ID number when you register your business. You can apply for the EIN at the IRS website with clear instructions on how to go about the application. Some specific companies that need a tax ID number include retail sales, services, and goods, online selling, renting and leasing commercial real estate, repair, and maintenance of equipment.

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Florida Corporate Tax

Florida Corporate Tax

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As in any other country, Florida has its very own set of rules and policies about the different kinds of tax that they collect. Among the central tax that is being collected in Florida is the sales tax, as well as use tax. Corporate income tax and intangible tax are also among the main taxes being collected in this country.

In Florida, they do not collect a personal income tax.

When doing business in Florida, it is imperative that the company or the corporation fulfill an obligation to file a corporate income tax or franchise tax. Fl corporate tax is required from all corporations operating businesses in this country unless they are tax-exempt. It is also required for those who are getting income or are living in Florida.

By this, it also means that all corporations that are federally taxed as corporations are subject to the tax. For businesses out of Florida, though, federal income is adjusted based on different factors, which include the business’ sales, payroll, and property. Additional Florida adjustments include the pluses and the minuses that are matched against the business’ activities within Florida as opposed to the entity’s activities outside.

All businesses, companies, and corporations, even those out of state, but earn or receive an income in Florida are also required to do their tax returns and file a Florida corporate income tax (unless they are exempt). These entities must file their tax returns even if they do not have a tax due.

Some entities that are exempt from filing tax are sole proprietorships, S corporations, estates of decedents, testamentary trusts, and individuals unless they need to pay federal income tax that they owe.

The Florida corporate tax rate is set at 5.5% and is applicable to all income. However, exemptions usually decrease a corporation’s tax rate significantly. Although this is the case, the company is obliged to settle the higher amount of the standard rate fewer credits and exemptions, or the business can also opt to do the 3.3%, which is the alternative minimum tax rate.

As for small businesses like a C- corporation, though, the tax rate is set at 21% or an average of 19.8%. Tax payment from businesses, however, may vary, depending on the type of entity.

Any business, corporation, or company, including all the other entities that are required to file their tax, are expected to fill out the necessary and appropriate tax return. This process must be done even if these entities do not owe any tax.

There are certain organizations that are exempted from tax, including Florida S corporations that are not really obliged to file a Florida corporate tax return as long they do not have federal taxable income.

Who then is required to file a Florida corporate tax?

Basically, all entities including all corporations, businesses, companies even the tax-exempt organizations, and associations such as bank and savings associations, homeowner and condominium associations, Florida S corporate companies, political organizations, a limited liability company (LLC), and an LLC that is categorized as a partnership for Florida and federal income tax purpose are all required to file a Florida corporate tax for as long as they are transacting business, earning income or living in Florida.

As for the case of a sole member LLC, they are not required to file a separate Florida corporate tax return as they are not included for federal and Florida income tax purposes. Its income is reported on the owner’s tax return.

A piece of additional information on the homeowner’s association is that if they file a federal return on form 1120, they are required to file a Florida corporate income tax return, even if there is no tax due. But if they file federal form 1120-H, then they do not have to file a Florida corporate income tax return.

Though generally, a not-for-profit corporation also needs to file a Florida corporate income tax, there are some types of these corporations that are tax- exempted but are required to file a Florida corporate income tax return if the entity has an unrelated business taxable income or if they file federal forms 1120-C or 990-T with the Internal Revenue Service (IRS).

How is Florida Corporate Income Tax Rate Computed?

According to the Florida Department of Revenue, the way Florida corporate income tax is computed is based on the federal taxable income then revamped by some subtractions, adjustments, and additions to come up with the new federal income.

This new federal income is prorated using Florida’s 3- factor formula, which is a weighted average of 3 factors which comprise: 25% for the property, 25% for the payroll, and 50% for the sales. After this, non- business income that is designated to Florida is added to the newly adjusted Florida portion of the federal income.

After this addition, the exemption is then subtracted in order to come up with the Florida net income. Finally, you can arrive at the tax by multiplying Florida net income by the corresponding tax rate that is based on the beginning taxable year, prior to January 1, 2019, January 1, 2019- December 31, 2021; and on or after January 1, 2022.

Are There Corporate Income Tax Rate Incentives?

In Florida, there are so many incentives that can be generated through corporate income tax. One example is getting credits when you pay salaries in Florida. Another one is when you pay assessments and other types of tax, and you can get credits as well when you make investments or build businesses in Florida.

Aside from these incentives, Florida may also be popular for businesses or even individuals because the filing of a personal income tax is not required. What more is that they only have a 6% sales tax.

To avoid penalties and trouble with the Florida Department of Revenue, it is best to know when the due dates are, and what appropriate forms to file.

For the corporate tax, the appropriate form is the Florida Corporate Income/ Franchise Tax Return or Florida Form F-1120. This must be filed yearly, even if there is no tax due.

Florida Form F-1120 is due on: for the tax year ending on June 30, the due is on or before the 1st day of the 4th month following the close of the tax year. For any other tax year endings, the due is on or before the 1st day of the 5th month following the close of the tax year.

Other important notes to remember is the 15th day after the due date without extension is for the filing of the federal return for the taxable year.

Knowing these due dates are very important to save you from tax penalties because if you file a late tax, a 10% penalty of any unpaid tax for every 30 days or fraction thereof without exceeding 50% of unpaid tax is charged.

However, if there is no tax due, a $50 penalty per month or a fraction thereof without exceeding $300 will be in effect. Another floating rate of interest would be applicable to late tax payment as well as underpayments.

Are there Extensions to the Filing of Tax?

If the business wishes to have an extension with regards to the filing of their corporate income tax rate, they may do so by filing Florida Tentative Income/ Franchise Tax Return, as well as Application for Extension of Time to File Return or Form F- 7004 along with the business’ tax payment with the original due date of their return.

This kind of process may be filed electronically. Though extensions for filing a corporate income tax return is allowed, this does not mean that the payment due date is extended as well. Should the business fail to pay on time, the penalty will be based and calculated from the original due date of the corporate income tax return.

These extensions are only good for six months except for those with June 30 tax year-end, as extensions for those are valid for seven months.

Is There a Minimum Corporate Tax?

There used to be an alternative minimum tax before the taxable years preceding January 1, 2018. After that, there is none.

What If the Business Wishes to be Considered as a Florida S Corporate?

If the entity is already registered, they can simply submit a copy of the IRS Notice of Acceptance as an S corporation; or they can also give a copy of the 1st page of the federal form 1120-S.

When Should Estimated Tax Payments be Made?

Each taxpayer has an obligation to make estimated tax payments if they can foresee that the corporate income tax liability will go beyond $2,500. Should the corporation incur a debt that exceeds $2,500 in Florida corporate tax every year, then estimated tax payments should be made on Florida Form F-1120 ES or Declaration/ Installment of Florida Estimated Income/ Franchise Tax?

With estimated tax payments, four equal installments that would sum up to 90% of the current year’s corporate tax liability can be made.

This can be filed electronically.

If there is an underpayment, there will be a 12% penalty that will be charged for each year.

Is There an Exemption for Corporate Income Tax?

There can only be one exemption for taxpayers that belong to a controlled group that consists of taxpayers and the associated group that is sister companies regardless if they are filing an incorporated form or not.

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Florida resale certificate

Florida resale certificate

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If you own a business and you want to enter the market in Florida, there are several things that you have to comply with. All companies need to get a Florida Resale Certificate for sales tax even if their business is not located within the state. The federal government requires businesses to pay sales tax when they sell goods and services to Florida consumers.

More so, before a business can collect and remit sales tax to the state, they have to register with the Department of Revenue Office in Florida to get their Resale Certificate. With such a certificate, every business owner or representative will only be allowed to rent or buy property or services tax-free when it is re-sold or re-rented. An Annual Resale Certificate is also a tax exemption certificate. It also allows you to buy goods for your business without the local sales tax. Here are some of the common questions that new business owners ask when told to file or register for a Florida resale certificate.

Do I need a Resale Certificate in Florida?

Businesses joining the market in Florida need to pay sales tax even if they do not have a retail location in the area. For instance, those who work remotely with warehouses, offices or employees in another state will need to register for a Florida Sale Tax and Annual Resale Certificate.

More so, retailers selling on Amazon may get a “Nexus” in Florida. Nexus refers to having a physical location in the state which obligates business owners to pay tax. This will apply when you use the Fulfillment by Amazon, because your goods may be stored in a warehouse by Amazon in Florida.

Nexus is a term for having a physical location in a state that triggers the obligation to pay sales taxes. You could have sales tax nexus in Florida because you have an office, warehouse, or remote employee based in the state. Thus, you need to check and monitor your Inventory Event Details to see where your products are stored. This will protect you from potential tax issues. On the other hand, your Annual Resale Certificate is valid for a year and you need to renew it before it expires.

Do I Need a Resale Certificate?

A Florida Resale Tax Certificate or a Reseller’s Permit is a legal document that you will need to prevent Florida tax sales payments for goods, resources or services that you will offer to Florida consumers. Resale tax for items is supposed to be paid only once and it is paid for by the customer. Sellers are not supposed to shoulder tax for the goods that they sell. Thus, with this permit, suppliers are informed that a reseller is licensed to re-sell the items and that they should not collect tax when they are sold to you. Keep in mind that suppliers will require this certificate before they push through with their transactions with you.

On the other hand, although you can avoid paying tax on items you resell with the resale certificates, the things you will use for your business or those that you don’t resell will still be taxed.

Do I Need A Resale Certificate to Sell Online?

If your business buys goods or resources to re-sell and you don’t want to pay tax for them, you will need a reseller’s permit or resales certificates. For instance, you want to purchase wholesale products for your online store in eBay or Amazon, you still need to apply and register for Resale Certificates. Suppliers and resources will often ask buyers to present this resale certificates before they conduct business with you.

Some states do not require resellers to register for a resale certificate. These include Montana, Alaska, New Hampshire, Oregon, and Delaware. Those who live in these states can conduct businesses without the need for a reseller’s license. On the other hand, if you will be using Amazon Fulfillment services, check whether you have stocks stored in Florida warehouses as you might need to register for a Florida Resale Certificate for them.

Do I need A Resale License to Buy Wholesale?

US citizens with businesses that require the purchase of wholesale products from US-based suppliers may require a Resale permit or reseller’s license from the state where they are located.

Likewise, a resale certificate will allow business owners and resellers to buy wholesale goods without the need to pay sales tax. With this certificate, business owners can also collect sales tax from customers as the end consumer of the goods.

Without this certificate, business owners will be obligated to pay sales tax on the goods that they buy wholesale for the purpose of reselling them. While some owners just add the tax you paid as a deduction on the return. But it will complicate matters than just presenting a reseller’s permit when transacting with suppliers.

Keep in mind that most suppliers will ask for a sales tax license or reseller’s ID before they sell any goods to you. This is because they are obliged to check whether they need to collect sales tax with you as the end-user.

It is relatively easy to get an Annual Resale Certificate. This is specifically true if you have a business or a market in Florida. There are several ways to file your application including the required documents. They have an online application system that makes it easier for businesses to apply. Likewise, you can check out their online site for a list of resources and other common questions.

As business owners, you don’t want to pay sales taxes for items that you sell. Unless you will be using it as the end consumer, the goods you buy on wholesale should not be taxed. Thus, it is essential for you to register and get your Annual Resale Certificate in Florida if you have a market or a physical store in the state. Resale licenses work like a “flag” that says you sell to others and you can purchase wholesale goods without paying taxes.

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