Florida S Corporation Tax Return

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. 

Get straightforward accounting advice that helps you grow.

We’re here to help

Let's talk about how we can work together to achieve your goals.

Scroll to Top