New York and California are attractive states to establish businesses due to their bustling industries and high population centers. However, that popularity comes with a price: higher operational costs and tax rates, which is why many owners and entrepreneurs are looking elsewhere to establish their businesses, including one of the most business-friendly states in the country, Florida. Its economy and industries have continued to attract small businesses who appreciate the state's tax-friendliness and pro-business culture.Want to know <a href="https://1800accountant.com/blog/start-business-florida">how to start a new business in Florida</a>? Then, you should forget about federal tax and the Internal Revenue Service (IRS) for a moment because you’ll want to know about state taxes. Use this comprehensive guide to everything you should know about <a href="https://1800accountant.com/blog/florida-small-business-tax">Florida's small business and corporate tax rates</a>.<h2>How Do Business Taxes in Florida Work?</h2>Only C corporations pay state income tax in Florida. No other business entity has this requirement, including limited liability companies (LLCs) and S corps, which are pass-through entities.If you're one of the following corporation types, you must file taxes in Florida. This includes business owners and corporations earning income, corporations operating in the state, and organizations with tax exemptions.<h3>Key Takeaways</h3>Use this guide to learn how the entity your business is formed as is taxed, why it is beneficial to operate in Florida, and other important takeaways, including:<ul><li>Whether individuals <a href="https://1800accountant.com/blog/how-much-do-small-businesses-pay-in-taxes">pay taxes in Florida</a>&nbsp;</li><li>Tax responsibilities of Florida-based pass-through entities</li><li>C corp state tax protocols</li></ul><h2>Florida Corporate Tax Rates</h2><h3>How are C Corporations taxed in Florida?</h3>Florida businesses operating as corporations must file Form F-1120 to report their income to public records, even if they won’t have taxes due. They must also file annually using Form F-1120.You must calculate the Florida corporate income base and rate to determine how much you owe on your C corp business tax return. The tax base is a formula consisting of three factors:&nbsp;<ul><li>Payroll (25%)</li><li>Property (25%)</li><li>Sales (50%).</li></ul>Then, you’ll add non-business income and subtract an exemption to determine your net income. The current net income exemption is $50,000 and can only be used once among the members of a controlled group of corporations. After determining your net income for your Florida business, you’ll figure out your tax rate.The current corporate income tax rate in Florida is 5.5%. Florida offers several corporate income tax incentives that will help your business reduce the amount owed. Potential incentives include:<ul><li>Capital Investment Tax Credit</li><li>Community Contribution Tax Credit</li><li>Florida Alternative Minimum Tax Credit (AMT)</li><li>New Markets Tax Credit</li><li>Rural Job Tax Credit</li></ul><h3>How are S Corporations taxed in Florida?</h3><a href="https://1800accountant.com/blog/start-s-corp-florida">Taxes for an S corporation</a>, or S corp, are unique in Florida. Compared to a C corporation, S corps aren’t subject to federal income taxes because S corps are pass-through entities.Instead, the business will pass federal income tax on the annual income of its owners, called shareholders. Individual federal income tax rates determine this amount. Florida does not feature a state income tax.&nbsp;<h2>Florida Tax Rates for LLCs</h2>Like S corporations, Florida LLCs operate as pass-through entities. This means that if you start an LLC in Florida, the business won’t pay federal income tax on that income.<a href="https://1800accountant.com/blog/llc-florida">LLCs have a few options</a> regarding how they’ll pay Florida business taxes, which include:<ul><li>A disregarded entity</li><li>An incorporated LLC, or</li><li>A partnership</li></ul>Disregarded entities (single-member LLCs) in Florida don’t have to file a second Florida corporate income tax return. In this scenario, you would use the LLC owner’s return, whether your Florida LLC is owned directly or indirectly by a corporation.A corporation that owns a single-member LLC must also file a Florida corporate income/franchise tax return to report:<ul><li>Its own income</li><li>Single-member LLC’s income, even if ownership of the LLC is the corporation’s sole business activity</li></ul>While uncommon, incorporated LLCs must <a href="https://dos.fl.gov/library-archives/research/florida-information/business/starting-a-business-in-florida/small-business/taxes/" target="_blank">pay state income taxes</a>. In this situation, the income tax rate is either 3.3% (the alternative minimum tax) or 5.5%.To file income taxes as an LLC classified as a corporation, you’ll complete a Florida corporate income/franchise tax return. LLCs classified as corporations will file Form F-1065 if one or more of its owners is a corporation. Any owner of this LLC type must also file a corporate income tax return.<h2>Partnership Business Taxes in Florida</h2>You can choose from <a href="https://www.stateofflorida.com/taxes/" target="_blank">three partnership types in Florida</a>.&nbsp;&nbsp;&nbsp;<ul><li>General partnership. A general partnership involves at least two people who own the business. Its partners can individually enter binding agreements, business deals, or contracts, which might be advantageous in certain circumstances.&nbsp;</li><li>Limited partnership. A limited partnership also consists of two or more partners, which can be one or more general partners who operate the partnership with unlimited liability or one or more limited partners who don’t operate the partnership without liability.</li><li>Limited liability partnership. A limited liability partnership has two or more partners. Unlike a limited partnership that can feature general or limited partners, all partners are considered general partners who operate this type of partnership. Partners in a limited liability partnership have both limited and shared liability.</li></ul>All three partnership types are pass-through entities, resulting in federal income from the partnership to each partner for individual tax payments.&nbsp;<h2>Sole Proprietorship Taxes in Florida</h2>Sole proprietorships are perhaps the <a href="https://1800accountant.com/blog/how-to-register-a-small-business-in-florida">easiest business entity to form in Florida</a>. This business entity indicates that the small business owner will solely operate their own business.As a result, sole proprietors must file federal income taxes. However, their income is individual, not based on their business. The sole proprietor will then pay taxes based on an individual’s tax rate.And because a sole proprietorship isn’t a corporation, a sole proprietor also won’t have to pay state taxes in Florida.&nbsp;<h2>Taxes for Multistate Businesses in Florida</h2>If your business operates in multiple states, you may also owe taxes in those states, which is called a tax nexus. A tax nexus indicates you've exceeded the minimum requirement for state officials to collect tax from your out-of-state business. Tax nexus rules vary by region, so reviewing them before entering each respective market is best.&nbsp;In addition to nexus considerations, given the size of Florida and its proximity to other states in the panhandle region, there may be some unusual tax situations you or your employees may encounter. Scenarios include:<ul><li>You lived in two states during the same tax year.</li><li>You work in another state but live in Florida.</li><li>You work in Florida but live in another state.&nbsp;</li></ul>Florida does not participate in reciprocity agreements, which ensure that out-of-state residents pay income tax only in their home state.<h2>Other Florida State Taxes</h2>There are <a href="https://www.nerdwallet.com/article/small-business/small-business-grants-florida" target="_blank">additional taxes business owners</a> might also be responsible for in the state of Florida. These include:&nbsp;<ul><li>Use tax. A 6% use tax is due on using or consuming taxable goods or services when sales tax wasn't paid when purchased.</li><li>Sales tax. A 6% sales tax is included in the price of taxable goods or services and collected from the purchaser at the time of sale.</li><li>Unemployment tax payments. Florida-based employers pay the 2.7% Florida Reemployment Tax, which is deposited into a trust fund.&nbsp;</li><li>Excise tax. Items, including gas, cigarettes, cell phones, and alcohol, are subject to this tax.</li></ul><h2>Benefits of Having a Small Business in Florida</h2>Establishing your small business in Florida offers numerous benefits. The state is a popular tourist destination due to its bright, sunny weather. The tourism dollars, the state's business-friendly climate, and the world-famous cities of Miami and Tampa make Florida a popular destination for small business owners and entrepreneurs to live and work.While the labor market is competitive, it attracts the qualified professionals your business needs who can maximize the seasonal economy while minimizing lean periods.<h2>How to File Business Taxes in Florida</h2>These steps must be <a href="https://1800accountant.com/blog/prepare-file-small-business-tax-return">taken to file your Florida C corporation taxes</a>.&nbsp;&nbsp;&nbsp;<ol><li>IRS Form-1120. Corporations must file this form each year whether or not they owe money in taxes to governmental authorities.</li><li>Florida corporate income base and rate. Florida corporations must calculate based on payroll, property, and sales.</li><li>Net Income. Add non-business income and subtract an exemption to determine net income.</li></ol>After determining net income, the proper tax rate can be identified. Corporate tax incentives are also available, which can help reduce a corporation's overall tax bill.<div class="embedded-entry redactor-component block-entry" type="entry" data-sys-entry-uid="blt7626d80de5e39a0c" data-sys-entry-locale="en-us" data-sys-content-type-uid="rte_ad" sys-style-type="block"></div>Visit <a href="https://floridarevenue.com/taxes/taxesfees/Pages/corporate.aspx" target="_blank">Florida's Department of Revenue</a> for additional information.<h2>Work with the Professionals</h2>Florida small business tax rates vary based on numerous factors, including your business entity type. Regardless of how your business is structured, avoiding mistakes that can seriously impact your tax burden is imperative. That's why so many Floridians trust 1-800Accountant, America's leading virtual accounting firm for small businesses, for their needs.Whether it's <a href="https://1800accountant.com/services/locations/florida">Florida small business tax preparation</a>,&nbsp; <a href="https://1800accountant.com/services/business-tax-advisory">tax advisory</a>, or any of our professional accounting services, we have the solution you need at a price that fits your budget. Schedule a quick consultation – usually 30 minutes or less – to learn how we can help your business flourish in the Sunshine State!

Use this comprehensive guide to everything you should know about Florida's small business and corporate tax rates […]

Group 10856 (1).png

Florida's Tax Rates For Small Businesses and Corporations

This article will offer guidance on when a landlord should hire an accountant. We’ll also explain how a real estate accountant can benefit your rental property business […]

Group 10952 (1).png

When Should a Landlord Hire an Accountant?

Business owners interested in entering the New York market must understand the state taxes, regulations, and other financial responsibilities associated with running a small business in the region […]

Group 10987.png

What to Know About New York State Small Business Taxes

Learning bookkeeping tips and basics is vital whether you've been handling your books for a while or just starting. Use this excellent article to learn the five small business bookkeeping basics you can't ignore […]

Group 10946.png

5 Small Business Bookkeeping Basics You Can’t Ignore

5 Small Business Bookkeeping Basics You Can't Ignore

On December 27, 2024, Bench Accounting announced it was shutting down, putting thousands of small business owners in a difficult position just ahead of tax season. Bench clients will face many high-pressure decisions in the coming days, and we hope this article will alleviate some of your stress by empowering you with the information you need to move forward.While details had been scarce for a couple of days, Bench's main page updated clients with this message on December 30, 2024: "We’re excited to share some important news: Bench is being acquired by Employer.com. Your service will continue seamlessly with the platform you’ve always trusted. To continue, please log in." Once clients log in, they must either consent to transfer ownership of their data from Bench to <a href="https://techcrunch.com/2024/12/30/bench-to-be-acquired-after-abruptly-shutting-down/" target="_blank">employer.com, a relatively new company with an unproven track record</a>, or opt-out and download their data. Opting out suspends your services and indicates you will not be refunded. Before the acquisition was announced, Bench said clients could access their data from December 30, 2024, to March 7, 2025.&nbsp;This article, updated regularly, will inform you about the latest Bench developments and what its former clients can do to fulfill their tax obligations in less-than-ideal short-term conditions.&nbsp;<h2>Why is Bench Shutting Down?</h2>While it is unclear what the precise reason or series of events that led to Bench's closure was, Ian Crosby, a co-founder who had previously left the firm, offered some insight <a href="https://www.linkedin.com/posts/iwcrosby_im-very-sad-today-to-see-that-bench-accounting-activity-7278491381528981506-wQkZ" target="_blank">via social media:</a> "I had been battling with some of the board members over strategy. They wanted me to take the company in a new direction that I thought was a very bad idea. I wanted to continue with what was working and with what our partners had signed on to distribute. I was intransigent."Analysis and other insights emerging from Bench's closure and acquisition shouldn't distract you from important decisions you must consider. Do you risk your business's financial future on an unknown entity in employer.com, or should you embrace other proven financial firms in continuous operation? 1-800Accountant has served over 100,000 small businesses with an innovative mix of accounting experts and technology since its founding a decade ago.&nbsp;If you choose to use a different financial services firm, they must be capable of ensuring a seamless transition from Bench.&nbsp;<h2>If I pre-paid for Bench, can I get a refund?</h2>If you choose to use a different financial services provider, Bench will not provide a refund for the services you paid for. While this is understandably upsetting, you may be able to take action depending on when you purchased services.&nbsp;If you purchased services from Bench within the last 90 days, you may be able to file a chargeback with your credit card company. We suggest contacting your credit card institution immediately for more information and to potentially begin the chargeback filing process.&nbsp;<h2>Should I file an extension for my 2025 taxes if Bench was doing my books?</h2>Whether you should <a href="https://1800accountant.com/blog/file-for-an-extension">file an extension</a> for your small business will depend on numerous factors, including the overall complexity of your finances. Filing for a tax extension can be <a href="https://1800accountant.com/blog/benefits-of-a-tax-extension">tremendously beneficial</a>. It can give you the additional time you need to get your paperwork in order as you deal with this sudden transition from Bench to a new financial services provider.Speak with small business tax professionals if you're struggling with the decision to file a tax extension.&nbsp;<h2>Finding the Right Bench Accounting Alternative for Your Business</h2>1-800Accountant, America's leading virtual accounting firm, is ready to help fast to ensure you last. For a decade and counting, our <a href="https://1800accountant.com/services/bookkeeping">full-service bookkeeping</a>, <a href="https://1800accountant.com/services/payroll">payroll</a>, and <a href="https://1800accountant.com/services/small-business-taxes">accounting solutions</a>, powered by real bookkeeping, payroll, and accounting professionals, ensure compatibility with your current books, error-free tax preparation and filing, and smooth, reliable payroll each period. And if you require a custom solution outside our core financial services, we have forged strategic partnerships with leading financial institutions to ensure you're covered. Learn more about <a href="https://1800accountant.com/blog/legalzoom-and-1-800accountant-partner-announcement">our recent partnership with LegalZoom</a> to grasp the scope and scale of our flourishing operations.Schedule a quick consultation—usually 30 minutes or less—to learn how we can help you get off the bench and back in action quickly!

On December 27, 2024, Bench Accounting suddenly announced it was shutting down, leaving thousands of small business clients scrambling just ahead of tax season […]

Image-2024-12-30 15_24_11.png

Bench Accounting Shut Down: What Customers Need to Know & Alternatives

Use this informative article as your checklist for the top deductions available for hairstylists and barbers […]

Group 10950.png

Taxes 101: Deduction Checklist for Hair Stylists and Barbers

This article will help you understand Forms 1095-A, 1095-B, and 1095-C. We’ll explain who should file each form and what to report […]

Frame 30 (1).png

What Are Forms 1095 A, B and C (+ Which Ones You Need to File)

Forms 1095-A, 1095-B, and 1095-C: Which 1095 Form Should You File?

<h1>Empowering Small Businesses: 1-800Accountant and LegalZoom Join Forces</h1>Running a small business is a journey filled with opportunities and challenges. From navigating legal formalities to managing day-to-day finances, entrepreneurs often juggle multiple responsibilities as they work toward their next milestone. In an exciting move that illustrates their commitment to addressing these small business challenges, 1-800Accountant and LegalZoom have joined forces to provide a one-stop solution for tax and bookkeeping needs. This partnership marks a meaningful leap toward simplifying and unifying financial and compliance processes, enabling business owners to focus more time on growth and innovation.<h3>A Partnership Built for Small Business Success</h3>LegalZoom, a leader in legal services for small businesses, and 1-800Accountant, a pioneer in virtual accounting, share a common vision: empowering small business owners with the tools and support they need to succeed long-term. Together, they aim to deliver a seamless and comprehensive financial management experience.This collaboration combines LegalZoom’s expertise in forming and managing businesses with 1-800Accountant’s robust <a href="https://1800accountant.com/services/small-business-taxes">tax preparation</a>, <a href="https://1800accountant.com/services/bookkeeping">bookkeeping</a>, and <a href="https://1800accountant.com/services/payroll">payroll services</a>. Whether launching a new venture or streamlining an existing operation, this partnership ensures you have access to legal and financial expertise all in one place.<h3>Why This Matters for Small Business Owners</h3>Managing taxes and bookkeeping is a time-consuming and complex task. For many small business owners, it can detract from their ability to focus on core business activities. With LegalZoom and 1-800Accountant’s combined services, entrepreneurs can:<ul><li>Save Time: Streamline administrative tasks by leveraging professional tax and bookkeeping solutions.</li><li>Ensure Compliance: Stay ahead of ever-changing tax regulations and filing deadlines.</li><li>Access Expert Guidance: Receive personalized advice tailored to the unique needs of their business.</li></ul><h3>The Power of 1-800Accountant</h3>For over a decade, 1-800Accountant has transformed how small businesses manage their finances. We combine cutting-edge technology with experienced accounting professionals to provide a range of services tailored to small business owners' needs.<h4>Comprehensive Services for Every Business Need</h4><ul><li>Tax Preparation and Filing: From federal to state and local taxes, 1-800Accountant ensures accurate and timely filings, helping businesses minimize liabilities and maximize returns.</li><li>Bookkeeping Services: Keep your finances organized with professional bookkeeping support, ensuring you always have clear and accurate records.</li><li>Payroll Management: Simplify payroll processing while ensuring compliance with tax regulations and labor laws.</li><li><a href="https://1800accountant.com/services/business-tax-advisory">Financial Planning and Advice</a>: Gain actionable insights into your business’s financial health and make informed decisions for growth.</li></ul><h4>Personalized Support</h4>1-800Accountant’s mission is to give small businesses the personalized attention they deserve. Business owners can connect with their dedicated accounting team who understands their industry and goals through our virtual platform. This personalized approach ensures clients receive advice and solutions tailored to their unique circumstances.<h4>Technology-Driven Solutions</h4>The platform leverages advanced technology to make financial management more efficient and accessible. From cloud-based bookkeeping tools to AI-driven tax insights, 1-800Accountant ensures that small business owners have the resources they need to stay ahead of their competition.<h3>Looking Ahead: What This Partnership Means</h3>The synergy between 1-800Accountant and LegalZoom is a game-changer for small business owners. The partnership addresses two of the most critical business aspects by integrating legal and financial services. This collaboration is not just about services; it’s about empowering entrepreneurs to meet their goals and achieve their dreams.

In an exciting move that illustrates their commitment to addressing these small business challenges, 1-800Accountant and LegalZoom have joined forces to provide a one-stop solution for tax and bookkeeping needs [...]

legalzoom.png

1-800Accountant and LegalZoom Partner to Empower Small Business Owners

If you're in the midst of moving from hobby to side hustle, you probably have a grip on scaling up your production quality. But have you considered the tax implications? […]

Frame 17.png

7 Tax Write-Offs for Content Creators to Pay Lower Taxes

Excepteur sint occaecat cupidatat

JOIN NOW!

Your small business resource for accounting, bookkeeping, and taxes from our experts.

Accounting, Bookkeeping, & Tax Blog

Screenshot_2023-08-14_at_1.36_1.png

CLP_JoinUs_Testimonial_WomanBlueBackground_3.png

Huong T
“Excellent first call, very informative. This is my third business … this time  I will ease the burden and use 1-800Accountant [for accounting]”

By clicking "Confirm My Appointment" you agree to our <a href="https://1800accountant.com/terms-of-services" target="_blank">Terms of Service</a>. This includes permission to communicate with you about your appointments via phone, email, or SMS. If you prefer to opt-out of SMS communications you may uncheck this box