How to Start an S Corp in Florida
Starting an S corporation (S corp) in Florida is easy, and electing an S corp tax designation could potentially save your business money in taxes. Our guide will walk you through the process of starting your Florida S corporation and provide you with tips on maintaining your S corp.
Want to form an S corp elsewhere? Check out our other How to Start an S corp guides to learn more.
We recommend using a professional formation service like Tailor Brands to get your S corp up and running in no time.
Factors to Consider Before Starting an S Corp in Florida
Before forming a Florida S corp, you have to consider the following factors:
- Is an S corporation the best strategy for your business?
- S corporation restrictions
- Are S corp tax advantages right for you?
Is an S Corporation the Best Strategy for Your Business?
For help with choosing the right structure for your business, visit our Choosing a Business Structure guide.
Florida S Corporation Restrictions
S corps have several restrictions, such as being limited to one class of stock and 100 shareholders. Read our What Is an S Corporation guide for full details.
Are S Corp Tax Advantages Right for You?
An S corporation is a tax designation that can be elected by an LLC or corporation. With an S corp, business owners are considered employees of the company and must receive a reasonable salary. Since all S corps technically have employees, the s corp must run payroll.
In order to benefit from a Florida S corp tax designation, your business needs to make enough money to offset payroll expenses. Furthermore, S corps are beneficial for business owners who take large distributions in addition to their salary.
To learn more about the tax advantages of an S corp, read our LLC vs. S corp guide and take a look at our S Corp tax calculator.
Businesses that elect S corp status will need to hire payroll and accounting services.
How to Form a Florida S Corp
There are two main ways to start an S corp:
- By forming an LLC and electing S corp tax status from the IRS when you request your employee identification number (EIN)
- By forming a corporation and electing S corp status from the IRS
We recommend not starting a corporation with the S corp tax status because the S corp negates all of the benefits of a corporation.
Recommended: If you have an existing LLC, visit our How to Convert an LLC to S Corp guide.
Steps for Forming an LLC and Electing S Corp Status in Florida
Starting a Florida LLC and electing S corp tax status is easy. You can use our guides to start an LLC with the S corp status yourself, or you can hire a service provider like Tailor Brands to guide you through this process.
There are five basic steps to start an LLC and elect S corp status:
Step 1: Name Your LLC
Step 2: Choose a Registered Agent
Step 3: File the Articles of Organization
Step 4: Create an Operating Agreement
Step 5: Get an EIN and File Form 2553 to Elect S Corp Tax Status
Step 1: Name Your LLC
Choosing a company name is the first and most important step in starting your LLC in Florida.
Be sure to choose a name that complies with Florida naming requirements and is easily searchable by potential clients.
1. Follow the naming guidelines for a Florida LLC:
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Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
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Your name cannot contain language implying that the LLC is organized for an unlawful purpose or one not stated in its Articles of Organization.
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Your name cannot contain language implying that the LLC is connected with a state or federal government agency or corporation.
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Certain restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual to be part of your LLC.
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Your name must be distinguishable from any existing business in the state, except for certain fictitious name registrations, general partnership registrations, and limited liability partnership statements. Do a Florida LLC name search to determine if your name is unique.
You can also read the Florida state statute about LLC naming guidelines for more information.
2. Is the name available in Florida? You can use the Florida Secretary of State’s business entity search on the state’s SunBiz website to see if your desired LLC name is available.
3. Is the URL available? We recommend checking to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.
Step 2: Choose Your Florida Registered Agent
You must elect a registered agent for your Florida LLC.
An LLC registered agent will accept legal documents and tax notices on your LLC's behalf. You will list your registered agent when you file your LLC's Articles of Organization.
Many business owners choose to hire a registered agent service. Many of these services will form your LLC for a small fee and include the first year of registered agent services for free.
Florida Registered Agent Consent to Appointment
Registered agents in Florida must consent to their appointment by signing the Articles of Organization in written or electronic form.
Step 3: File the Florida LLC Articles of Organization
The Florida Articles of Organization is used to officially register an LLC.
OPTION 1: File Online With Florida Sunbiz
- OR -
OPTION 2: File by Mail
State Filing Cost: $125, payable to the Florida Department of State (Nonrefundable)
Mailing Address:
New Filing Section
Division of Corporations
P.O. Box 6327
Tallahassee, FL 32314
Step 4: Create an LLC Operating Agreement
An LLC operating agreement is a legal document that outlines the ownership and member duties of your LLC.
For more information, read our Florida LLC Operating Agreement guide.
Our operating agreement tool is a free resource for business owners.
Step 5: Get an EIN and Complete Form 2553 on the IRS Website
An EIN is a number that is used by the US Internal Revenue Service (IRS) to identify and tax businesses. It is essentially a Social Security number for a business.
EINs are free when you apply directly with the IRS.
Elect S Corp Tax Status
During the online EIN application, the IRS will provide a link to Form 2553, the Election By a Small Business form.
Visit our Form 2553 Instructions guide for detailed help with completing the form.
This is the form to elect S corp tax status for your LLC:
Ready to start saving on your taxes?
We recommend using a formation service to start your Florida S corp for you, so you can focus on the things that matter most — growing your business.
Keep Your Florida S Corp Compliant
After starting your Florida business and electing the S corp taxation designation, you must be sure to obey Florida state and local laws to keep your business compliant and in good standing. Florida businesses must file an annual report each year and pay state-specific taxes.
Florida S Corp Annual Report
All Florida LLCs that are taxed as S corporations must file an annual report with the Florida Division of Corporations. These reports ensure that the state has updated information on your business. Even if nothing changes from one year to the next, you are still required to file an annual report for your S corp.
Annual reports are due each year before the third Friday of September. Failure to file will result in your business being dissolved.These reports can be filed online with Florida’s Division of Corporations.
Florida S Corp Taxes
S corporations benefit from pass-through taxation, meaning the business’s profits pass-through to S corp owners’ individual tax returns. S corp owners make money from their reasonable salary and distributions, and Florida S corp owners can expect to pay the following taxes:
Federal Self-Employment Taxes
Self-employment taxes cover social security and medicare. The self-employment tax rate is 15.3%, and money you take as salary will be subjected to the self-employment tax. However, distributions are not subjected to this tax.
Federal Income Taxes
Your federal income taxes will depend on your tax bracket, and the cutoffs for individual tax brackets as well as the percent owed will change each year. Both your salary and distributions are subjected to federal income tax.
Florida Income Taxes
Florida has no state income tax. Meaning, business owners in Florida still have to pay federal income taxes but do not owe additional taxes on their income to the state of Florida. This makes Florida one of only seven states with a 0% income tax rate. Some states have an income tax rate upwards of 8%, and Florida’s 0% tax rate has likely contributed to its position as a rapidly growing economic hub in the United States.
Florida Sales and Use Tax
Florida has a state sales tax rate of 6%. In addition to this, many Florida counties have a county tax, known as a Discretionary Sales Surtax. This is a sales tax in addition to the state tax rate. If your business sells taxable goods or services, you must register as a sales and use tax dealer with the Florida Department of Revenue.
Taxes can be paid online, and your filing frequency is based on how much you collect in annual taxes. Visit the Florida Department of Revenue’s website for more information.
Additional State Taxes
Florida’s Department of Revenue oversees the collection of various taxes that businesses may have to pay depending on their location, industry, and number of employees.
These are a few taxes that business owners in Florida may be responsible for paying:
- Communications service tax
- Gross receipts tax on utilities
- Battery fee
- New tire fee
- Severance taxes
To learn more, check out Florida’s Department of Revenue website. Their Florida business tax application tool and tax education platform will help you determine which taxes your business will need to pay each year.
Florida Local Taxes
The local laws and ordinances in Miami may be different from those in Tampa. Regardless of where you live in Florida, we recommend you check with your local jurisdiction and ensure that your business obtains all local permits and follows local regulations.
Start an S Corp FAQ
What is an S corp?
An S corporation (S corp) is a tax designation for which an LLC or a corporation can apply.
Are taxes for LLCs and S corps the same?
No. The default taxes for an LLC and taxes for an S corp are not the same.
With an S corp, owners pay personal income tax and self-employment tax on a predetermined salary. They may then withdraw any remaining profits from the business as a “distribution,” which isn’t subject to self-employment tax.
With an LLC, all company profits pass through to the owners’ personal tax returns, and then the owners must pay personal income tax and self-employment tax on the entire amount.
What is a reasonable salary for an S corp?
S corp owners are required to earn a “reasonable” salary, which basically means a fair market rate based on the individual’s qualifications as well as their duties and responsibilities at the company. The purpose of this requirement is to prevent S corp owners from paying themselves an artificially low salary in order to pay less self-employment tax.
What is a distribution?
A distribution is a dividend that a shareholder/owner can take from the business profits that remain after a company pays all of its employee salaries. Shareholders must pay personal income tax on distributions, but distributions aren’t subject to self-employment tax.
Can I still use my DBA name if I elect to be an S corp?
LLCs and corporations that operate under a “doing business as” (DBA) name can choose the S corp election.