Hi everyone, I’m Bette Hochberger, CPA, CGMA. Operating an S Corporation in Florida comes with a specific set of responsibilities. Whether you’re just starting or have been in the game for a while, it’s essential to ensure you’re in compliance with both federal and state regulations. Here’s a breakdown of what you need to be aware of:

Federal Requirements for S Corporations

  • Annual Tax Return: File the Form 1120S, U.S. Income Tax Return for an S Corporation, each year.
  • Employee Compensation: If you draw a salary from the business, ensure correct federal tax withholdings.
  • Quarterly Estimated Tax Payments: Depending on your income, you might need to make payments to the IRS every quarter.
  • Shareholder Reporting: Annually provide shareholders with a Schedule K-1 (Form 1120S) detailing their share of the corporation’s financials.

Florida’s State-Specific Checklist

  • Annual Report: File an annual report with the Florida Department of State to maintain active status.
  • State Income Tax: Florida does not levy a personal income tax, which includes pass-through distributions from an S Corporation.
  • Sales and Use Tax: If selling goods or certain services, ensure you collect and remit sales tax.
  • Reemployment Tax: If you have employees, you may be subject to this tax.
  • Local Requirements: Depending on your business location, you may need specific county or city licenses and permits.

General Business Practices

  • Maintaining Records: Keep thorough financial records, including meeting minutes, bylaws, and shareholder agreements.
  • Annual Meetings: It’s essential to hold annual meetings for both shareholders and directors.
  • Operate According to Bylaws: Ensure all actions and decisions align with the company’s bylaws or operating agreement.
  • Renewals: Stay updated on business license renewals or permits at both the state and local levels.

Points to Note for Florida Businesses

  • Sunbiz: Regularly check Sunbiz.org for updates or requirements specific to Florida corporations.
  • Liability Insurance: Depending on the nature of your business, consider obtaining the appropriate levels of liability insurance.

So, while running an S Corporation in Florida has its advantages, it’s crucial to stay on top of these requirements to ensure smooth operations. For a tailored assessment of your business’s needs, partnering with a local CPA or legal expert can be invaluable.