IRS Tax Return Filing for Florida LLC

Setting up a Limited Liability Company (LLC) in Florida allows business owners to enjoy increased flexibility, protection from liability, and possible tax savings.

However, neglecting to comply with IRS tax filing stipulations can lead to hefty fees and penalties.

In this article, we will discuss the process of IRS tax return filing for Florida LLC, focusing on classifying the taxes, reporting the taxes, deadlines, and other relevant details.

How Florida LLCs Are Taxed

At the federal level, LLCs do not have a standalone tax system like corporations. Instead, the IRS categorizes LLCs based on the type of member and the type of tax treatment selected.

Single-Member LLCs: Florida LLCs with a single owner are classified as disregarded entities by default, meaning income and expenses are passed on to the owner’s tax return (Form 1040, Schedule C). This allows the owner to avoid double taxation but requires them to pay self-employment taxes, which can be quite significant.

Multi-Member LLCs: LLCs with more than one member are considered partnerships, thus an LLC with two or more members must file Form 1065 (U.S. Return of Partnership Income). All members, whether or not payments are made, are required to pay taxes on their share of the income.

LLCs Electing Corporate Taxation: An LLC in Florida may elect to be treated as an S Corporation (1120-S) or C Corporation (1120) by submitting Form 2553 or Form 8832, respectively. This is advantageous for certain businesses wishing to optimize their taxation treatment.

Federal Tax Filing Requirements of Florida LLCs

1. Single Member LLC (Disregarded Entity)

A single-member LLC is not required to submit a separate business tax return and instead:

• The owner includes income and expenses on Schedule C with the 1040.
• If the LLC has a staff, they will need to submit Form 941 (Quarterly Employment Tax Return) and Form 940 (Annual FUTA Tax Return).
• Self-employment tax has to be paid through Schedule SE, which includes Social Security and Medicare.
• Taxes can be reduced by claiming a variety of business expenses including operating expenses, home office use, and mileage.

2. Multi-Member LLC (Partnership)

Multi-member LLCs are required to file:

• Form 1065 to report income, deductions, and credits.
• Everyone gets a Schedule K-1 that tells them their profits and losses share proportion.
• K-1 income is reported on a personal tax return by members (1040).
• The LLC does not pay federal income tax, but members must pay self-employment taxes on their share of the profits.

3. S-Corporation Tax Treatment for an LLC

An LLC that has S Corp status will typically file:

• Form 1120-S(U.S. Income Tax Return for an S Corporation).
• Members will receive Schedule K-1 to indicate their share of income.
• The business owner only pays self-employment taxes on his or her paycheck, while the remaining profit is taxed at the individual level.
• For owners who are paid a salary, payroll must be set up so that reasonable compensation is paid per IRS guidelines.

4. C-Corporation Tax Treatment for an LLC

A Florida LLC taxed as a C Corp must:

• 1120 (U.S. Corporation Income Tax Return).
• Pay federal corporate income tax at the designated percent (currently 21%).
• Authorize dividend distribution payment taxes on personal taxpayer returns by shareholders which may result in double taxation.
• Retain governing documents such as the minute book, meeting minutes, and any pertinent financial documents needed for IRS compliance.

Florida State Tax Obligations for LLCs

Since Florida does not tax individual income, this is beneficial for single and multi-member LLCs that pass income to owners. However, certain taxes may still apply:

Corporate Income Tax: LLCs taxed as C Corporations must pay 5.5% state corporate income tax.

Sales Tax: If the LLC sells taxable goods or services, the LLC must collect and remit Florida sales tax.

Tax Employment: LLCs with employees must register for the Reemployment Tax (RT-6) and file tax employment returns.

Time Reporting: An LLC active in Florida is required to file annual reports to the Department of State.

IRS Tax Deadlines for Florida LLCs

It is important to keep within deadlines to ensure that you do not incur penalties. Here are the important dates:

• Single-membered LLCs will fill it on the same date as individual tax returns, which is the 15th of April.
• Multi-membered LLCs will fill it out on the 15th of March via Form 1065.
• S Corporations via form 1120-S will fill it on the 15th of March.
• C Corporations on form 1120 will fill it on the 15th of April.
• Every year on the 15th of April, June, September, and January quarterly estimate taxes should be filed.

Consequences of Not Filing Taxes for a Florida LLC

Late submission of mandatory taxes will result in:

• Late submission fines start at $210 monthly for S corps and partnerships.
• Interest for unpaid taxes which increase every day.
• Forfeiture of good standing in the Florida Division of Corporations.
• Examinations from the IRS for further checks.
• Cancellation of business permits or control issues at the state level.

How to File IRS Tax Returns for a Florida LLC

Collect relevant paperwork: Earnings, outgoing payments, staff payments, and any other related financial activity.

Determine your tax classification: Based on the authority ruling in Form 2553, and electing to elect using Form 8832 or the default IRS regulation.

Complete the appropriate tax forms: Fill out either Form 1040 (Schedule C), Form 1065, Form 1120-S, or Form 1120.

Submit online: Through the IRS e-File or with assisted tax software.

Pay taxes owed: Payments can be made through IRS Direct Pay, EFTPS, or check.

Keep copies of the submitted returns for at least three years.

Get guidance from an expert: If your financial dealings for the LLC are intricate, it would be best to hire an accountant.

Tax Deductions for Florida LLCs

Florida LLCs can reduce the amount of taxable income using the following deductions:

Home office deduction: If you utilize a portion of your residence for business activities, you can deduct a portion of the rent, interest on the mortgage, and utility expenses.

Business expenses: Costs related to advertising, office materials, professional services, and travel can be deducted.

Vehicle expenses: Business mileage can be reimbursed at the IRS standard mileage rate.

Wages and benefits of employees: Salaries, premiums for health insurance, and contributions to a retirement plan are all claimed as expenses.

Depreciation: The business portion of fixed assets like equipment and machinery are depreciated over other taxable income.

How EasyFiling Can Help File IRS Taxes for Florida LLCs

Filing IRS tax returns for a Florida LLC can be challenging with the diverse structure and tasks such as classification, compliance, and other issues on top of deductions. EasyFiling simplifies the process by:

• Providing expert tax filing assistance for your LLC with specific requirements.
• Making sure all tax forms are filed completely and on time.
• Providing bookkeeping services with EasyBooks to keep accurate financial files.
• Helping clients avoid penalties by making sure businesses stay in compliance with IRS regulations.
• Facilitating clients with strategies on tax planning to reduce liabilities.

With EasyFiling, you can put your energy into scaling your business, while restraining our workforce, poised to handle your filing professionally.

Conclusion

Understanding IRS tax return filing for LLCs established in the state of Florida ensures compliance with the tax regulations and saves you from fatal penalties.

Disregarded entity, partnership, or corporation, understanding obligations in taxation and the deadlines keeps you focused.

When in need of expert help, look like a tax consultant or take Easybooks from Easyfiling for effortless bookkeeping and filing with taxes.

Frequently Asked Questions (FAQs)

1. Do Florida LLCs complete Federal tax returns?

Florida LLCs fill out federal tax returns regardless of their classification because they all have to (Schedule C, Form 1065, Form 1120-S, or Form 1120).

2. Are self-employed taxes applicable for single-member LLCs in Florida?

Self-employment tax applies to single-member LLC owners and their net income.

3. What are the consequences of not submitting the taxes for an LLC?

Not filing taxes can incur penalties, interest, IRS reviews, and suspension of good standing with the merchant.

4. Is it possible for an LLC to modify its preferred tax classification?

An LLC can choose to be taxed as an S Corp or C Corp by filing Form 2553 or Form 8832.

5. Do Florida LLCs pay an income tax to the state?

Only if Florida LLCs are taxed as C Corporations do they have to pay income tax to the state, otherwise no.