Owning a business comes with endless opportunities. However, it also comes with just as many responsibilities. One of the most common responsibilities that business owners have is to pay taxes. Not paying taxes comes with ever-increasing penalties that can significantly impact the business’s success. Understanding your tax liabilities can make it easier to calculate a tax estimation. That way, you can plan for tax expenses and budget for them.
Federal Taxes
All business types, excluding partnerships, must file a federal income tax return. Depending on the business situation, the business may owe federal income taxes. The Internal Revenue Service (IRS) requires businesses to pay quarterly estimated taxes throughout the year. Because of this, there may not be a liability at the time of filing. Not making enough estimated tax payments can result in the business owing money at the time of filing. In addition, a business with employees must make income tax payments based on the amount withheld from the employee’s paycheck. Employment taxes include Social Security and Medicare taxes, federal income taxes, and federal unemployment taxes.
Some businesses may also be required to pay a federal excise tax. Typically, these are companies that manufacture or sell specific products, use certain kinds of equipment, or receive payment for certain services. Examples of the most common qualifying categories include environmental, fuel, communications, air transportation, or heavy equipment taxes. Because these categories can be broad-reaching, it is best to speak with a tax attorney who can guide a business owner on potential tax liability.
Corporate Income/Franchise Tax
Florida requires some businesses to pay corporate income or franchise taxes. This applies to C corporations and LLCs that are classified as corporations. Businesses must pay this tax if they exceed state-defined annual liability amounts. There are also specific deadlines for form filing and making payment. Speaking with a business or corporate attorney can help business owners meet crucial deadlines.
Sales and Use Tax
Businesses in Florida that provide certain services or participate in retail sales must collect sales tax as a part of their business. Then, this collected tax must be paid to the state. Depending on the business’ sales volume, forms and payments could be required monthly, quarterly, or annually.
Reemployment Insurance Tax
The Florida reemployment tax is the money employers pay into the Unemployment Compensation Trust Fund. This program benefits Florida residents by giving them a temporary income while they look for work. Companies must pay a percentage of a certain amount paid to each employee for each calendar year. Working with a business or employment attorney can help business owners accurately calculate this tax.
Tangible Personal Property Tax
If a Florida business owns personal property, property taxes could be owed on it. The amount of tax owed will depend on the type and value of the property. Business owners must report and pay this tax annually. Generally, real estate qualifies as an asset that requires separate tax payments. However, other assets could qualify for additional tax payments, so speaking with a tax lawyer or accountant will ensure a business owner doesn’t miss a personal property tax payment.
Tax Deadlines
Different state and federal tax liabilities have a range of deadlines that a business must meet. Failing to do so can result in additional penalties and fines. So, while business owners need to know the taxes they are liable for, they must also know when they need to pay the owed taxes.
Calculate Your Tax Estimation
Owning a business in Florida means managing a variety of tax obligations, including federal, state, and local requirements. Missteps, such as missed deadlines or miscalculated payments, can lead to fines and complications. Understanding each requirement, from federal income taxes and sales tax to corporate income and reemployment insurance taxes, ensures your business operates smoothly. An experienced attorney can help you navigate these responsibilities, mitigate liability, and develop a strategy to avoid penalties.
Schedule a consultation with our experienced attorneys to understand your tax liabilities as a business owner.
