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.