Does the State of Florida Require LLC Tax Return

By Salvatore Jackson

Under Florida business law, all businesses that wish to conduct significant economic activity in Florida must register with the Florida Secretary of State. After registering a limited liability company, or LLC, with the Florida Secretary of State, the LLC must pay taxes annually to the Florida Department of Revenue. The amount of tax that an LLC must pay to the Florida Department of Revenue depends on the type of business the LLC is engaged in and the amount of revenue generated by the LLC.

Under Florida business law, all businesses that wish to conduct significant economic activity in Florida must register with the Florida Secretary of State. After registering a limited liability company, or LLC, with the Florida Secretary of State, the LLC must pay taxes annually to the Florida Department of Revenue. The amount of tax that an LLC must pay to the Florida Department of Revenue depends on the type of business the LLC is engaged in and the amount of revenue generated by the LLC.

Florida Corporate Income Tax

The assessment of Florida’s corporate income tax is based off the LLC’s computation of federal taxable income. From the amount of LLC income that is taxable on the federal level, an LLC must add any non-business income earned in the state of Florida. From this total, the Florida Department of Revenue exempts $5,000 to arrive at an amount of taxable Florida net income. The amount of corporate income tax assessed is 5.5 percent of an LLC’s taxable Florida net income.

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Paying Florida Corporate Income Tax

The form an LLC must use to pay tax to the Florida Department of Revenue depends on how the LLC is classified for federal taxation purposes. If the IRS classifies the LLC as a corporation, the LLC must file Form F-1120. If the IRS classifies the LLC as a partnership, the LLC must file Form F-1065. If the IRS classifies the LLC as a sole proprietorship, the LLC does not have to file and pay corporate income tax. If you estimate that your LLC will need to pay less than $2,500 in corporate income tax for a given year, you may file Form F-1120A. Tax payments to the Florida Department of Revenue are due on the last day of the 4th month, 6th month, 9th month and on the final day of the tax year.

Foreign LLC's

A foreign LLC, which is an LLC organized in another state that has obtained a Certificate of Authority from the Florida Secretary of State, must pay Florida corporate income tax. An LLC may apportion the amount of taxable Florida net income based on the LLC’s economic activity in Florida. The amount of taxable Florida net income for an LLC is a weighted average of 25 percent of income derived from Florida property, 25 percent of payroll paid in Florida and 50 percent of sales made by the LLC in Florida. The amount of corporate income tax assessed to a foreign LLC is 5.5 percent of this weighted average.

Tax Incentives

Florida offers tax incentives to LLCs that maintain a business operation in an enterprise zone. Additionally, an LLC may claim tax deductions for charitable donations and donations to nonprofit scholarship funding organizations. A Florida LLC may also claim tax deductions for the production of renewable energy or the investment in hydrogen and biofuel technology infrastructure. These incentives reduce the amount of taxable Florida net income.

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What Records Are Needed to Keep for an LLC in Florida?

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Florida Limited Liability Company Regulations

A limited liability company (LLC) can offer the tax advantages of a partnership combined with the limited liability of a traditional company. It is a flexible form of business entity and can be organized with a minimum of one member. In Florida, LLCs are regulated by the Florida Limited Liability Company Act, contained in Chapter 608 of the Florida Statutes. The Act is administered by the Corporations Division of the Secretary of State, also known as Sunbiz.

Are Members of an LLC Subject to Self Employment Tax?

The Internal Revenue Service requires all taxpayers to contribute to the Social Security and Medicare system through employment taxes. Employed taxpayers have these amounts deducted from paychecks. Members of an LLC who do not have employment taxes paid on their behalf are responsible for remitting self-employment tax payments to the IRS.

Net Operating Loss for a Sole Proprietorship

It isn’t uncommon for sole proprietors to report losses in some years, which are the result of incurring business expenses that exceed total revenue. You may be able to use these losses to offset some of the other income reported on your tax return. However, if after combining your sole proprietorship losses with your other income the result is still a loss, you may have a net operating loss, or NOL, that you can deduct from the taxable income you report in different tax years.

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