Florida LLC Taxation Guide
Many entrepreneurs choose to form a Florida LLC because of the tax benefits it offers. However, it is important to understand what taxes an LLC pays and how they are filed.
Florida doesn’t impose a state income tax on LLCs, so all profits and losses pass through to the owners. However, some LLCs choose to be taxed as corporations and file a separate federal return and Florida corporate income tax return. If you want your LLC to be treated as a corporation for federal purposes, you’ll need to file Form 8832 with the IRS and request elective status as a C-corporation. C-corps must pay a higher rate of taxes but can take advantage of certain tax breaks not available to other business entities.
If an LLC has employees, it must pay federal employer taxes, which include Social Security tax and Medicare taxes. It also must pay state employee wage withholding taxes, known as reemployment tax.
LLCs have more tax flexibility than Florida corporations, but it’s important to consult with an accountant or CPA to make sure you understand the full benefits of this entity type. You can find a qualified professional by searching our directory.
All Florida LLCs must have a registered agent with a physical address (no P.O. boxes) in the state. This person is responsible for receiving legal documents and tax notifications on behalf of the LLC. You can find a registered agent by searching our directory or by purchasing our Startup package. The minimum fee for this service is $125, which includes the Articles of Organization filing and registered agent designation fees.
How Much Tax Florida LLCs Pay?
One of the major tax advantages of forming an LLC in Florida is the lack of state income taxes on the business itself. Here’s a breakdown of what Florida LLCs typically pay:
Federal Self-Employment Tax: This tax covers Social Security and Medicare. The rate is 15.3% on the first $145,600 of net income (as of 2024).
Florida Sales Tax: Florida has a base sales tax rate of 6%. However, some localities add additional sales taxes, so the total rate you collect may vary depending on your location.
Other Taxes: Depending on your industry and business activities, you might also encounter other state or federal taxes.
How Do Florida LLCs Pay Their Taxes?
You’ll report your share of the LLC’s income and expenses on your personal income tax return using Schedule E. The IRS offers various payment options for federal taxes, including:
Online: You can pay electronically through the IRS website using a direct debit, credit card, or electronic funds transfer (EFT).
By Phone: You can call the IRS Automated Phone System to make a payment using a debit or credit card.
By Mail: You can mail a check or money order payable to the “United States Treasury” along with a payment voucher.
These are the most common methods, but there might be other options available depending on your specific situation. It’s always best to consult with a tax professional or refer to the IRS and Florida Department of Revenue websites for the latest information on filing and payment options.
