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LLC Taxes in Florida - Everything You Need to Know

Max Smith

Reading Time: 7 minutes

Are you thinking of starting an LLC in Florida but worried about the taxes it comes with? Well, you are not alone in this, as every Florida LLC owner is genuinely concerned about the LLC taxes in Florida.

You may follow a few steps to file your LLC taxes. It will help you avoid complications and pay as little as possible. 

Moreover, there are different types of LLC taxes to pay. In fact, the taxation method is not the same for every entity type of LLC, for example, a single-member LLC or a multimember LLC. Indeed, you should get an idea of the taxation amount to prepare your budget. 

Our article is a gift-wrapped box containing many issues regarding different types and methods of LLC tax payments in Florida. So, let’s go dig deep into LLC taxation in Florida.

Florida LLCs are subject to various taxes, fees, and obligations. However, the main ones are discussed below.

1. Federal Income Tax

The LLC itself does not pay its taxes for federal income tax purposes. The profits and losses “pass through” to the members and get reported on their personal tax returns. However, LLCs with multiple members must file Form 1065, U.S. Return of Partnership Income, with the IRS.

2. State Income Tax

As Florida does not impose a state income tax on individuals or businesses, your LLC is not subject to a state income tax on its profits.

3. Sales Tax

Collect and send sales tax to the Florida Department of Revenue if your LLC sells taxable goods or services. For a sales tax permit, register with the state. Then, start collecting sales tax from your clients at an appropriate rate and send it to the state. Again, file for this tax monthly or quarterly.

4. Use Tax

In most cases, use tax is owed when the seller does not collect sales tax while purchasing from the Internet or out-of-state merchants.

5. Employment Taxes

Pay a few taxes to the IRS from your LLC employees’ wages by withholding them. They are the federal income tax, the Social Security tax, and the Medicare tax. Additionally, pay for federal unemployment tax (FUTA) and state unemployment tax (SUTA).

6. State Fees

Your LLC must file an annual report with the Florida Division of Corporations. It is to pay a filing fee online. Moreover, file it by May 1st each year for around a $138.75 fee.

7. Local Business Taxes

LLCs are subject to local business taxes in some Florida counties and municipalities. It is also known as an occupational license or business tax. Besides, the rate is not fixed, as it varies by location. So check with your local government for specific information.

As you have learned about various taxes, you might wonder: which type of tax suits you and how? Let’s find out!

How are LLCs Taxed in Florida?

Depending on the classification for federal tax purposes, LLCs are taxed differently in Florida. How is an LLC taxed in Florida is based on your LLC type.

  • Single-Member LLCs

A single-member LLC in Florida is a ‘disregarded entity’ by default. It is for federal purposes, so the IRS does not identify it as a separate entity from its owner.

The profits and losses are recorded on Form 1040, the owner’s individual tax return. That owner files Schedule C, detailing business income and expenses. 

Plus, they also pay self-employment taxes. It includes Medicare and Social Security taxes based on their net income.

  • Multi-Member LLCs 

A multi-member LLC in Florida is considered a partnership by default. It is also for federal purposes. As the LLC itself does not pay the tax, instead of the members, they file individual tax returns with profits and losses.

Nevertheless, the members are required to file Form 1065 with the IRS. It is the U.S. Return of Partnership Income form.

  • S Corporation Taxation

A Florida LLC can elect S corporation taxation with the IRS. Here, profits and losses still pass through to the individual members for federal tax purposes. However, the benefit is that self-employment taxes can be saved. For this, reasonable salaries should be paid to members who are employees, too.

In addition, there are conditions to be eligible for S Corporation status. For example, shareholders should own less than a hundred shares and not more than one class of stock.

  • C Corporation Taxation

Corporation taxation is another option for Florida LLCs. The IRS treats it as a separate entity for federal tax purposes. The shareholders can pay taxes on dividends received from the corporation.

  • State Taxation

There is no state income tax on individuals or businesses in Florida. That is why Florida LLCs will not have to pay any state income tax on their profits.

Lastly, there are different types of taxes with different rates to pay. Now, do you know the tax amount to pay?  Let’s go to the next section to figure it out!

How Much Taxes Does an LLC Pay in Florida?

In Florida, LLCs need to pay different rates for different taxes. Here are the potential taxes for an LLC in Florida and their possible estimations:

  • Federal Income Tax

There is no federal income tax for a Florida LLC, at least not directly. Single-member LLCs are disregarded entities, and multi-member LLCs are treated as partnerships. It means that profits and losses are carried over to each member’s personal tax return.

So, the amount of this tax is not fixed. The members pay that at the rate of their respective LLC shares.

  • Employment Taxes

When employees are in a Florida LLC, taxes like Social Security and Medicare are withheld from their wages. The employer also pays matching amounts for federal unemployment taxes (FUTA). However, these tax rates are not fixed, as they depend on employee numbers and wages.

Also, the IRS considers the LLC owner to be self-employed. This federal self-employment tax is currently around 15.3%.

  • Sales Tax

You may collect and pay sales tax if your LLC sells products or services in Florida. Although Florida’s standard sales tax rate is 6%, some local surtaxes may apply. As a result, the total rate will be higher in some areas.

Moreover, an LLC’s taxable sales and the applicable tax rate determine the collected LLC sales tax amount.

  • Local Business Taxes

In Florida, local business taxes vary by county and municipality. Usually, a flat fee or a percentage of gross receipts is used to calculate these taxes. Furthermore, an LLC pays based on the kind of business, gross receipts, and local tax rates.

How to File LLC Taxes in Florida?

While you go through the steps to file your LLC taxes, there are several steps and factors. Here’s a general guide for filing taxes.

  • Determine Tax Classification

There are several classifications for LLCs in Florida, like a disregarded entity, partnership, S corporation, or C corporation. However, most LLCs are pass-through entities. Which means they are reported on the owner’s tax returns.

In addition, before starting to file for taxes, determine your tax classification.

  • Obtain an EIN

You must obtain an EIN from the IRS if there are employees or more than one member. But if there aren’t any, having an EIN for tax reporting is still advantageous.

  • File Annual Report

Your LLC is required to file an annual report with the Florida Division of Corporations. It is due by May 1st every year. Moreover, if you want to file it online, use the Florida State website (Sunbiz).

  • Determine Federal Tax Forms

You will need to file federal tax forms. Depending on your LLC’s tax classification, there are two types of LLC:

  1. Single-Member LLC: Enclose your tax return (Form 1040) with Schedule C.
  2. Multi-Member LLC: Provide each member a Schedule K-1 (Form 1065) and file Form 1065 (Partnership Return).
  • State Taxes

Florida individuals and LLCs are not subject to state income tax. However, your LLC might need to pay for other taxes like sales, use, or employment taxes.

  • Sales Tax

Collect sales tax from clients if your LLC offers taxable goods or services. Also, apply for a sales tax permit from the Florida Department of Revenue. In fact, sales tax returns should be filed periodically, and the collected sales tax should be sent to the state.

  • Employment Taxes

If your LLC has employees, withhold from their wages:

  • Federal income tax,
  • Social Security tax, &
  • Medicare tax.

Employer taxes, such as state unemployment taxes (SUTA) and federal unemployment taxes (FUTA), must also be paid.

  • Estimated Taxes

You might need to submit estimated tax payments to the IRS and the Florida Department of Revenue every quarter. The payment amount will depend on your LLC’s income and tax liabilities.

Conclusion​

Hopefully, you are now aware of everything there is to know about LLC taxes in Florida. It is a mandatory task, so learning the tax filing steps is essential for you as an LLC owner.

Additionally, the LLC taxation system, tax estimations, and various tax types are beneficial knowledge. In fact, it’s better to get an idea about the estimation of taxation for your specific LLC entity. 

However, since LLC taxation is complicated with penalties for error, we encourage you to consult a licensed tax expert familiar with Florida tax laws. So, form an LLC today in Florida to enjoy many benefits

Key Points

Watch out for some crucial points throughout our article.

  • Determine the tax classification of the LLC. It can be a disregarded entity, partnership, S corporation, or C corporation.
  • Obtain an Employer Identification Number (EIN) from the IRS.
  • By May 1st, submit an annual report to the Florida Division of Corporations.
  • Prepare and submit the appropriate federal tax forms, depending on the LLC’s tax classification. Form 1040 with Schedule C is for single-member LLCs. On the other hand, Form 1065 is for multi-member LLCs.
  • There is no state income tax on Florida LLCs. However, it might need to apply for a sales tax permit from the Florida Department of Revenue.
  • If conditions arise, there might be employment and estimated taxes, too.
  • Various types of taxes to pay. For example, federal income tax, state income tax, sales tax, use tax, employment taxes. State fees, & local business taxes.
  • LLCs are taxed based on their entity type. For instance,  single-member LLCs, multi-member LLCs, S corporation taxation, C corporation taxation, & tate taxation.
  • Federal income tax amounts depend on members’ shares of profits and losses.
  • Employment tax rates depend on employee numbers and wages. Meanwhile, the federal self-employment tax is currently around 15.3%.
  • Although the standard sales tax rate is 6%, it depends on the LLC’s location and taxable sales.
  • Local business taxes depend on the kind of business, gross receipts, and local tax rates.

Frequently Asked Questions

When are the LLC taxes due in Florida?

15th April is the due date for LLC taxes in Florida. The date is aligned with the federal tax deadline.

Can I do the Florida corporate tax payment online?

Yes! You may visit the department website and submit files to pay Florida taxes, like corporate income tax. However, you must enroll for eServices with the department to use online services. 

What is the Florida corporate income tax exemption form?

Taxation-exempt entities with “unrelated trade or business taxable income” for federal income tax reasons are charged the Florida corporate income tax & must submit Florida Form F-1120 or F-1120A.

Max Smith - LLC Formation

He is a seasoned entrepreneur and legal expert at LLC Formation Hub. With a stellar track record in both business and law, Max simplifies the complexities of LLCs. His practical insights, featured on LLC Formation Hub, empower entrepreneurs across the USA. Max merges business finesse with legal acuity to guide businesses toward success.


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