Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Florida Corporation Tax?

Florida Corporation Tax?

Old Oct 8th 2014, 10:21 pm
  #1  
Forum Regular
Thread Starter
 
Joined: Jan 2013
Posts: 73
Markstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond repute
Default Florida Corporation Tax?

Apologies if this is in the wrong part of the forum, but i'm trying to establish what the Florida equivalent of Corporation Tax would be on my E2 business. Does it work in the same way, a fixed % tax on profit? Any advice greatly appreciated.
Markstone492 is offline  
Old Oct 8th 2014, 10:35 pm
  #2  
Lost in BE Cyberspace
 
sir_eccles's Avatar
 
Joined: Mar 2010
Location: Phoenix, AZ
Posts: 8,106
sir_eccles has a reputation beyond reputesir_eccles has a reputation beyond reputesir_eccles has a reputation beyond reputesir_eccles has a reputation beyond reputesir_eccles has a reputation beyond reputesir_eccles has a reputation beyond reputesir_eccles has a reputation beyond reputesir_eccles has a reputation beyond reputesir_eccles has a reputation beyond reputesir_eccles has a reputation beyond reputesir_eccles has a reputation beyond repute
Default Re: Florida Corporation Tax?

I don't know the answer but it may depend on what sort of business you have and how it is structured. Is it an LLC? S-corp?
sir_eccles is offline  
Old Oct 8th 2014, 10:37 pm
  #3  
Forum Regular
Thread Starter
 
Joined: Jan 2013
Posts: 73
Markstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond repute
Default Re: Florida Corporation Tax?

Hi, it's a Computer Sales and Service business, owned by my Holding Company LLC. Hope that helps. Thanks.
Markstone492 is offline  
Old Oct 8th 2014, 11:33 pm
  #4  
Lost in BE Cyberspace
 
Michael's Avatar
 
Joined: Jun 2008
Location: San Francisco Bay Area
Posts: 10,678
Michael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond repute
Default Re: Florida Corporation Tax?

In the US, only large corporations are setup as C corporations since they have plenty of lawyers and accountants to get tax benefits. For others, they are setup as a LLC or a S corporation. For a LLC, all profits are taxed at the individual tax rate and for a S corporation, the owner(s) can chose to be taxed like a C corporation or a LLC. Almost every company that is setup as a S corporation, choses to be taxed like a LLC since most would pay more taxes if taxed as a S corporation.
Michael is offline  
Old Oct 8th 2014, 11:59 pm
  #5  
Grumpy Know-it-all
 
Steve_'s Avatar
 
Joined: Jul 2010
Location: Calgary, Alberta
Posts: 8,928
Steve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond repute
Default Re: Florida Corporation Tax?

Originally Posted by Markstone492 View Post
Apologies if this is in the wrong part of the forum, but i'm trying to establish what the Florida equivalent of Corporation Tax would be on my E2 business. Does it work in the same way, a fixed % tax on profit? Any advice greatly appreciated.
Well there is a Florida corporation tax, I think it's 5.5%, this is pretty much it chapter and verse: Florida Corporate Tax Rates - 2014

Like it says, the corp has to pay unless it's a flow-through entity like an S-corp (which is subject to personal rates of income tax, which in Florida means the Federal rates). So it depends on the structure you've used for your E-2 business.

In reality even if you used a C-corp, if it's a small business, you would simply pay yourself a large enough salary to reduce profits to zero so there would be no corporation tax.

The advantage of using a C-corp is that it looks less like a "subsistence" business, which is one of the criteria they use for issuing E-2. But I wouldn't get too worked up about it. I knew a dentist in Florida a long time ago who had E-2 and he was using an S-corp.
Steve_ is offline  
Old Oct 9th 2014, 8:25 am
  #6  
Forum Regular
Thread Starter
 
Joined: Jan 2013
Posts: 73
Markstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond reputeMarkstone492 has a reputation beyond repute
Default Re: Florida Corporation Tax?

Thanks Steve, and Michael, for the replies. Very helpful and greatly appreciated. I'm going the LLC route, as i'm the sole owner of the business. Thanks again guys.
Markstone492 is offline  
Old Oct 9th 2014, 6:05 pm
  #7  
 
thinbrit's Avatar
 
Joined: May 2008
Location: DFW
Posts: 984
thinbrit has a reputation beyond reputethinbrit has a reputation beyond reputethinbrit has a reputation beyond reputethinbrit has a reputation beyond reputethinbrit has a reputation beyond reputethinbrit has a reputation beyond reputethinbrit has a reputation beyond reputethinbrit has a reputation beyond reputethinbrit has a reputation beyond reputethinbrit has a reputation beyond reputethinbrit has a reputation beyond repute
Default Re: Florida Corporation Tax?

Originally Posted by Michael View Post
...Almost every company that is setup as a S corporation, choses to be taxed like a LLC since most would pay more taxes if taxed as a S corporation.
I think you mean that almost every LLC chooses to be taxed as an S Corp, right? In the most simple terms, an S-Corp is a tax election, not an entity. You cannot elect S Corp status unless you are already a sole proprietorship/partnership, C-Corp, or an LLC/PLLC.

I elected S Corp status for taxation of our PLLC so we can save on self-employment taxes. In essence, we pay ourselves a wage with the required employment taxes, but we can also take some money out of our business without paying Social Security and Medicare taxes (we pay income tax as usual on this portion).
thinbrit is offline  
Old Oct 9th 2014, 10:08 pm
  #8  
Lost in BE Cyberspace
 
Hotscot's Avatar
 
Joined: Jun 2011
Location: Los Angeles
Posts: 6,156
Hotscot has a reputation beyond reputeHotscot has a reputation beyond reputeHotscot has a reputation beyond reputeHotscot has a reputation beyond reputeHotscot has a reputation beyond reputeHotscot has a reputation beyond reputeHotscot has a reputation beyond reputeHotscot has a reputation beyond reputeHotscot has a reputation beyond reputeHotscot has a reputation beyond reputeHotscot has a reputation beyond repute
Default Re: Florida Corporation Tax?

Here in CA there's a mandatory $850 franchise tax for an LLC plus a percentage of profits after a certain amount.
Yup a tax whether you make any profits or not.
Hotscot is offline  
Old Oct 10th 2014, 2:38 am
  #9  
JAJ
Retired
 
JAJ's Avatar
 
Joined: Apr 2004
Posts: 34,649
JAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond repute
Default Re: Florida Corporation Tax?

Originally Posted by thinbrit View Post
I think you mean that almost every LLC chooses to be taxed as an S Corp, right? In the most simple terms, an S-Corp is a tax election, not an entity. You cannot elect S Corp status unless you are already a sole proprietorship/partnership, C-Corp, or an LLC/PLLC.

A single member LLC may also be a disregarded entity (for tax purposes), while a multi-member LLC could be taxed as a partnership.
Single Member Limited Liability Companies

As far as I understand, an S-Corp entity cannot be owned by a non-resident alien (if such an entity is so owned, it normally loses S-corp status). This is an important consideration for anyone on a visa like E-2.

Some State income tax authorities follow the Federal rules closely, others do not.
JAJ is offline  
Old Oct 10th 2014, 9:16 pm
  #10  
Grumpy Know-it-all
 
Steve_'s Avatar
 
Joined: Jul 2010
Location: Calgary, Alberta
Posts: 8,928
Steve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond repute
Default Re: Florida Corporation Tax?

Originally Posted by JAJ View Post
As far as I understand, an S-Corp entity cannot be owned by a non-resident alien (if such an entity is so owned, it normally loses S-corp status). This is an important consideration for anyone on a visa like E-2.
You can have an S-corp on E-2. E-2 is a non-immigrant status but you can file as a resident for tax purposes. Anyone in a non-immigrant status can, the requirement is that for an S-corp they cannot be a non-resident alien for tax purposes. In fact if you're on E-2 and you're in the US more than 183 days a year you basically have to file as a resident.
Steve_ is offline  
Old Oct 10th 2014, 9:20 pm
  #11  
Grumpy Know-it-all
 
Steve_'s Avatar
 
Joined: Jul 2010
Location: Calgary, Alberta
Posts: 8,928
Steve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond reputeSteve_ has a reputation beyond repute
Default Re: Florida Corporation Tax?

Originally Posted by thinbrit View Post
I think you mean that almost every LLC chooses to be taxed as an S Corp, right? In the most simple terms, an S-Corp is a tax election, not an entity. You cannot elect S Corp status unless you are already a sole proprietorship/partnership, C-Corp, or an LLC/PLLC.
These terminologies, like LLC, Ltd., etc. are all really State designations. The name doesn't really mean anything for federal tax purposes, it's the actual way it's organized as matter of fact that is relevant, not the name of it. Corporate terminology varies from State to State. I know here in Alberta there's a whole list of terminology you can pick from when you incorporate, the registry agent was like: "well this one makes it sound more American but this one might sound better internationally" - it's all meaningless.
Steve_ is offline  
Old Oct 11th 2014, 1:24 am
  #12  
JAJ
Retired
 
JAJ's Avatar
 
Joined: Apr 2004
Posts: 34,649
JAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond reputeJAJ has a reputation beyond repute
Default Re: Florida Corporation Tax?

Originally Posted by Steve_ View Post
You can have an S-corp on E-2. E-2 is a non-immigrant status but you can file as a resident for tax purposes. Anyone in a non-immigrant status can, the requirement is that for an S-corp they cannot be a non-resident alien for tax purposes. In fact if you're on E-2 and you're in the US more than 183 days a year you basically have to file as a resident.
Of course.

Except that since E-2 does not automatically lead to a green card status, E-2 holders should normally assume they will some day return home and become non-resident aliens again. At that point, if they have maintained their U.S. S-Corp, the status becomes invalid and it reverts to C-Corp. At a minimum, it may be prudent to dissolve the corporate entity, or distribute any retained income, before this occurs. In other words, if keeping the U.S. entity, make sure the transition to C-Corp status is planned, not unintentional.

Also be careful at the start of U.S. residence about forming an S-Corp at any time before the substantial presence test is made. At least, discuss the issue with a competent CPA.
JAJ is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.