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Florida S corporations are corporations that elect to pass corporate income, losses, deductions and credit through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income.

To qualify for S corporation status in Florida, the corporation must meet the following requirements:

• Be a domestic corporation
• Have only allowable shareholders
  • including individuals, certain trust, and estates and
  • may not include partnerships, corporations or non-resident alien shareholders
• Have no more than 100 shareholders
• Have one class of stock
• Not be an ineligible corporation i.e. certain financial institutions, insurance companies, and domestic international sales corporations.

In order to become an S corporation, the corporation must submit Form 2553 Election by a Small Business Corporation (PDF) signed by all the shareholders.

Federal Florida Sub S Filing Requirements:

FL Limited Liability Company (LLC)

A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations, and you should check with your state if you are interested in starting a Limited Liability Company.

Owners of an Florida  LLC are called members. Most states do not restrict ownership, and so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single-member” LLCs, those having only one owner.

A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state’s requirements and the federal tax regulations for further information. There are special rules for foreign LLCs.

Classifications of Florida LLC’s

Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a “disregarded entity”). Specifically, a domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless it files Form 8832 and affirmatively elects to be treated as a corporation. And an LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes (but as a separate entity for purposes of employment tax and certain excise taxes), unless it files Form 8832 and affirmatively elects to be treated as a corporation.

Effective Date of Election

An LLC that does not want to accept its default federal tax classification, or that wishes to change its classification, uses Form 8832, Entity Classification Election, to elect how it will be classified for federal tax purposes. Generally, an election specifying an LLC’s classification cannot take effect more than 75 days prior to the date the election is filed, nor can it take effect later than 12 months after the date the election is filed. An LLC may be eligible for late election relief in certain circumstances. See Form 8832 General Instructions for more information.

Corporations – State of Florida

In forming a Florida corporation, prospective shareholders exchange money, property, or both, for the corporation’s capital stock. A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. A corporation can also take special deductions. For federal income tax purposes, a C corporation is recognized as a separate taxpaying entity. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.

The profit of a Florida corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation.

If you are a C corporation, use the information in the chart below to help you determine some of the forms you may be required to file.

Corporations that have assets of $10 million or more and file at least 250 returns annually are required to electronically file their Forms 1120 and 1120S for tax years ending on or after December 31, 2007. For more e-file information, see References/Related Topics listed below.

Florida Corporation Information

If you previously applied for and received an EIN for your business, but have since misplaced it, try any or all of the following actions to locate the number:

• Find the computer-generated notice that was issued by the IRS when you applied for your EIN. This notice is issued as a confirmation of your application for, and receipt of an EIN.
• If you used your EIN to open a bank account, or apply for any type of state or local license, you should contact the bank or agency to secure your EIN.
• Ask the IRS to search for your EIN by calling the Business & Specialty Tax Line at (800) 829-4933. The hours of operation are 7:00 a.m. – 7:00 p.m. local time, Monday through Friday. An assistor will ask you for identifying information and provide the number to you over the telephone, as long as you are a person who is  authorized to receive it. Examples of an authorized person include, but are not limited to, a sole proprietor, a partner in a partnership, a corporate officer, a trustee of a trust, or an executor of an estate.

How to Apply for an EIN

Applying for an EIN is a free service offered by the Internal Revenue Service. Beware of Web sites on the Internet that charge for this free service.

If you are a home-care service recipient who has a previously assigned EIN either as a sole proprietor or as a household employer, do not apply for a new EIN. Use the EIN previously provided. If you can not locate your EIN for any reason, follow the instructions on the Lost or Misplaced Your EIN? Web page.

Apply Online
The Internet EIN application is the preferred method for customers to apply for and obtain an EIN. Once the application is completed, the information is validated during the online session, and an EIN is issued immediately. The online application process is available for all entities whose principal business, office or agency, or legal residence (in the case of an individual), is located in the United States or U.S. Territories. The principal officer, general partner, grantor, owner, trustor etc. must have a valid Taxpayer Identification Number (Social Security Number, Employer Identification Number, or Individual Taxpayer Identification Number) in order to use the online application.

Apply By EIN Toll-Free Telephone Service
Taxpayers can obtain an EIN immediately by calling the Business & Specialty Tax Line at (800) 829-4933. The hours of operation are 7:00 a.m. – 7:00 p.m. local time, Monday through Friday. An assistor takes the information, assigns the EIN, and provides the number to an authorized individual over the telephone. Note: International applicants must call (267) 941-1099 (Not a toll-free number).

Apply By FAX
Taxpayers can FAX the completed Form SS-4 (PDF) application to their state FAX number (see Where to File – Business Forms and Filing Addresses), after ensuring that the Form SS-4 contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type. If the taxpayer’s fax number is provided, a fax will be sent back with the EIN within four (4) business days.

Apply By Mail
The processing timeframe for an EIN application received by mail is four weeks. Ensure that the Form SS-4 (PDF) contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type and mailed to the taxpayer. Find out where to mail Form SS-4 on the “Where to File Your Taxes” (for Form SS-4) page.

Other Important Information

Daily Limitation of an Employer Identification Number
Effective May 21, 2012, to ensure fair and equitable treatment for all taxpayers, the Internal Revenue Service will limit Employer Identification Number (EIN) issuance to one per responsible party per day. This limitation is applicable to all requests for EINs whether online or by phone, fax or mail. We apologize for any inconvenience this may cause.

Responsible Party
In order to identify the correct individuals and entities applying for EINs, language changes have been made to the EIN process. Refer to Responsible Parties and Nominees to learn about these important changes before applying for an EIN.

Third Party Authorization
The Third Party Designee section must be completed at the bottom of the Form SS-4. The Form SS-4 must also be signed by the taxpayer for the third party designee authorization to be valid. The Form SS-4 must be mailed or faxed to the appropriate service center. A third party designee may call for an EIN; however a faxed Form SS-4, with the taxpayer’s signature, is still required. IRS assistors will take the information over the phone from the third party designee and ask the third party to fax the completed Form SS-4 to them (to the IRS assistor’s attention) at an administrative fax number. After receiving the faxed Form SS-4, the EIN will be assigned and faxed back to the third party designee, or given over the phone. The third party designee’s authority terminates at the time the EIN is assigned and released to the designee.

FEDERAL

• 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)

• Federal Employment Taxes
  (Income, Medicare and Social Security)
  Businesses with employees must withhold federal income tax, Medicare tax and Social Security tax from employees’ wages. All payments must be made electronically, 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)

• Federal 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. All payments must be made electronically, using the Electronic Federal Tax Payment System (EFTPS); 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

• Florida 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 in Florida 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)

• Florida 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

• Florida 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. If a business files $500 or less, it may file semiannually; $100 or less may file annually.

  Due: First day of the month

• Florida 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

• Florida 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