Start a Florida S Corp

Are you interested in establishing an S corporation in Florida but unsure of the necessary steps? Our guide is designed to assist you. It will explain the process of forming an S corporation in Florida, highlighting the potential tax advantages specific to the state.

Electing S corp status for a limited liability company (LLC) can lead to significant savings on self-employment taxes for its owners. Additionally, for C corporations operating within Florida, transitioning to an S corp structure can be an effective strategy to eliminate the burden of double taxation on business profits.

Florida S Corp Filing Requirements

S corporations have some filing requirements and limitations you should be aware of before you begin this process. Specifically, to qualify for S corporation status, an entity must:

• Be a domestic corporation or LLC
• Not be an ineligible corporation, such as certain financial institutions, insurance companies, and domestic international sales corporations
• Have only one class of stock
• Have no more than 100 shareholders or members (“shareholders” is the term for owners of a corporation, while “members” is the term for owners of an LLC)
• Have only allowable shareholders or members, which includes individuals, certain trusts, and estates. The shareholders may not be partnerships, corporations, or non-resident aliens. A nonresident alien is an alien who has not passed the green card test or the substantial presence test.

If your business entity meets these requirements, read on to learn how to apply for an S corp election. 

Filing as an S Corp in Florida

If you’re ready to learn about filing as an S corporation in Florida, we’ll walk you through it. First, we’ll show you how to form an LLC in Florida. If you’d rather form a corporation, follow the instructions on our incorporate in Florida.

Afterward, in Step 6, we’ll explain how to file for S corp tax status as either an LLC or corporation. We’ll also discuss specific considerations for S corporations in Florida.

Florida-Specific Considerations

In an S corporation, the business itself doesn’t usually pay federal income taxes. But what about Florida state income taxes?

Florida treats businesses that file as an S corp for federal purposes the same way when it comes to Florida state income tax. That is, the same pass-through taxation that applies to federal income taxes applies to state income taxes. The individual business owners will pay state income taxes on their share of the profits, but those profits won’t first be taxed at the business level. So, you shouldn’t need to worry about a separate Florida S corp tax rate. The only S corporations in Florida that would need to pay the state corporate income tax are those that pay federal income tax on Line 22c of Federal Form 1120S.

Some states require an S corporation to make a separate S corp election at the state level, but Florida doesn’t require that. If a company has a valid federal subchapter S corporation election, it will automatically be a Florida S corporation. 

 To create a Florida S corporation, you’ll need to create either an LLC or a C corporation if you haven’t already done so. Then, you’ll file an election form with the IRS.

S-Corp Election Steps for LLCs

For detailed formation steps, see our Florida LLC formation guide.

• Step 1 – Choose a business name
• Step 2 – Choose a registered agent
• Step 3 – File Florida Articles of Organization
• Step 4 – Create an operating agreement
• Step 5 – Apply for an EIN
• Step 6 – Apply for S Corp status with IRS Form 2553

S-Corp Election Steps for Corporations

For detailed formation steps, see our Florida Corporation formation guide.

• Step 1 – Decide on a business name for your Florida corporation
• Step 2 – Choose a Florida registered agent
• Step 3 – File the Florida Articles of Incorporation
• Step 4 – Hold the first meeting and choose directors for your Florida corporation
• Step 5 – Create corporate bylaws and a shareholder agreement
• Step 6 – Issue shares of stock for your Florida corporation
• Step 7 – Obtain an EIN and review Florida tax requirements
• Step 8 – Open a business bank account for your Florida corporation
• Step 9 – Apply for S Corp status with IRS Form 2553

File form to apply for S corp election

Submit the form to apply for S corp tax status. Once your LLC or C corporation formation is approved by the state, you need to file Form 2553, Election by a Small Business Corporation, with the IRS to get S corp status. 

The IRS requires that you complete and file your Form 2553: 

• Within 75 days of the formation of your LLC or C corporation, or no more than 75 days after the beginning of the tax year in which the election is to take effect

OR

• At any time during the tax year preceding the tax year the election is to take effect.

There’s one caveat for limited liability companies wanting to file as an S corp: If your LLC is past the 75-day election deadline, you’ll also need to file Form 8832, Entity Classification Election, to elect to be taxed as a corporation. Then you would file both Form 8832 and Form 2553 together via USPS-certified mail. 

All of the shareholders/members must sign the consent statement portion of the form. For more information on when and how to file Form 2553, visit the IRS website.

S Corp Tax Deadline in 2025

For S corporations in Florida, the tax filing deadline for the year 2025 is March 15. This deadline is crucial for submitting the corporation’s tax returns, which detail the previous year’s income, deductions, and dividends. Timely filing by this date is necessary to avoid penalties and ensures that shareholders receive the Schedule K-1 forms needed for their personal tax filings, due by April 15.

S corporations should prepare their financial documents well in advance to help ensure accurate reporting. Consulting with a tax professional is advisable to navigate compliance smoothly and optimize tax benefits, helping maintain the corporation’s financial health and legal standing.

Cost and Fees for Starting an S Corp in Florida 

Starting any business, including an S corporation in Florida, involves certain costs that are necessary for legal and operational compliance. If you’re planning to establish an S corp in the state, it’s important to be aware of the initial fees required to get your business up and running. Below is a breakdown of the mandatory fees associated with forming an S corporation in Florida:

• Filing Fees: The state of Florida requires a filing fee of . for processing the Articles of Incorporation, which is the primary document needed to officially register your corporation with the Florida Department of State. Meanwhile, the filing fee for the Articles of Organization (for LLCs) is $125. 
• Registered Agent Designation Fee: An additional fee of $25.00 for LLCs or $35.00 for corporations is required for the designation of a registered agent. This agent is responsible for handling important legal and tax documents on behalf of the corporation, ensuring that your business remains in good standing with the state.

These fees are essential for the proper registration and maintenance of your S corporation in Florida, helping ensure compliance with state regulations and facilitating smooth operations from the outset. However, these fees are only required if you don’t already have an LLC or corporation registered in Florida.

S Corp Florida: Pros and Cons

While S corp classification does come with a number of benefits for some businesses, making this election might not be right for every company. Carefully weigh the various pros and cons before deciding how you want to move forward. Consult an experienced tax professional about whether an S corp would be best for your business.

Advantages of S Corp Status for LLCs

A traditional LLC already has pass-through taxation by default, so the benefits of S corp election for an LLC have to do with the taxes for self-employment. This does take some explanation, but it could save certain LLCs a lot in taxes.

For tax purposes, the members of a standard LLC are considered self-employed. They’re paid by receiving their share of profits from the LLC, but they can’t be employed by the LLC, meaning that they’re self-employed. Being self-employed means paying taxes for self-employment (Social Security and Medicare, which add up to about 15.3%) on all profits they receive from the LLC. This is more than the taxes they’d pay when working for someone else because their employer would pay part of them.

But when the members elect S corp tax status, they can be compensated in two ways, by receiving their share of the profits and by being paid as an employee. Once they do that, they only pay Social Security and Medicare taxes on their salary and not the profits they receive. Depending on factors such as how profitable your company is, the savings could add up to a lot. Money paid out as salary is a tax-deductible expense for the business. 

Reasonable Compensation

One stipulation to this is that the IRS expects you to pay yourself a “reasonable salary” as an employee of the LLC. If they didn’t, you could pay yourself an annual salary of $3 and avoid contributing anything to Social Security and Medicare. Instead, the IRS expects you to pay yourself something similar to what others in your field are earning. 

Not paying yourself a reasonable salary can have severe consequences, including having your distributions reclassified as wages by force.

Advantages of S Corp Status for C Corporations

If you have a C corporation (the default form of corporation), filing as an S corp has several advantages in the Sunshine State: 

• Pass-through taxation: Normally corporations are subject to double taxation, but as an S corporation, only the shareholders pay taxes on their portion of the business income. 
• Writing off losses: Individual shareholders of an S corporation can write off the company’s losses on their personal income statements. C corporation shareholders can’t. 
• Qualified Business Income Deduction: Under the Tax Cuts and Jobs Act, some S corp owners may be able to deduct up to 20% of their qualified business income. This deduction isn’t available to C corporation shareholders.  

One quick note: since the Tax Cuts and Jobs Act of 2017, the federal corporate tax rate has been lowered to a flat 21%. Thus, the disadvantages of double taxation aren’t as severe now as they were. 

Disadvantages of S Corp Status for LLCs

Having an LLC with S corp status can have some drawbacks over a regular LLC:

• Stricter requirements: Unlike a standard LLC, an S corp can’t have more than 100 members, and those members can’t be partnerships, corporations, or non-resident aliens.
• More IRS scrutiny: Because of the “reasonable salary” requirement, the IRS tends to monitor LLCs filing as S corps more closely, meaning audits are more likely.
• More accounting and bookkeeping: Paying employment taxes as an owner-employee means you’ll need to do more bookkeeping (or hire someone to do it) in order to maintain accurate financial records.
• Potentially higher administrative costs: Hiring a bookkeeper or paying for bookkeeping software can be more expensive than a do-it-yourself approach.

Disadvantages of S Corp Status for C Corporations

S corporation status also has the following minuses for C corporations:

• Limited number of shareholders: S corporations can’t have more than 100 shareholders, while C corporations can have as many as they wish. 
• Limited shareholder types: Shareholders of an S corp must be U.S. citizens, certain trusts, or estates. C corporations don’t have that restriction.
• Only one class of stock: One way corporations attract investors is to offer preferred stock. That’s okay for C corporations, but the IRS doesn’t allow it for S corporations.

More IRS scrutiny: The IRS is more likely to audit S corporations than C corporations to ensure they’re paying taxes appropriately.

S Corp Tax Calculator

The S Corporation tax calculator below lets you choose how much to withdraw from your business each year, and how much of it you will take as salary (with the rest being taken as a distribution.) It will then show you how much money you can save in taxes.

Disclaimer: The savings estimate provided by this tool is for informational purposes only and should not be considered financial, tax, or legal advice. Actual savings may vary depending on individual circumstances and other factors. We recommend consulting with a qualified tax or legal professional before making any decisions regarding your business entity. ZenBusiness, Inc. is not responsible for any actions taken based on the information provided by this tool. Use of this tool does not establish any client relationship with ZenBusiness, Inc.

Florida S Corp vs C Corp,  S Corp vs LLC — The Main Differences 

In Florida, understanding the structural differences between an S corp, a C corp, and an LLC is critical for entrepreneurs choosing the optimal framework for their business. An S corp is not a business entity in itself but a tax status that can be elected by LLCs or corporations to gain specific tax advantages.

Florida S Corp vs C Corp

A Florida C corporation (C corp) is a legal entity recognized as separate from those who own, manage, and operate it. This separation provides the owners with liability protection, shielding personal assets from business debts and obligations. C corps are taxed at the corporate level, and any dividends paid to shareholders are taxed again at the individual level, a scenario known as double taxation. C corps file their taxes using IRS Form 1120.

In contrast, an S corporation (S corp) is a tax designation that can be elected by both LLCs and traditional corporations. This designation allows the entity to pass corporate income, losses, deductions, and credits through to shareholders for federal tax purposes. By electing S corp status, companies avoid double taxation on the corporate income, as profits are only taxed at the shareholder level. This tax structure is similar to that of a sole proprietorship or partnership, where income and losses are reported directly on the owner’s personal income tax returns.

S Corp vs LLC in Florida

An LLC, or limited liability company, in Florida offers liability protection akin to that of a corporation but is treated differently for tax purposes. An LLC can be managed by one or more managers (manager-managed) or directly by its owners (member-managed), offering flexibility in administration. Florida LLCs are generally pass-through entities for tax purposes, meaning the LLC itself does not pay taxes on business income. Instead, profits and losses are passed through to the individual owners’ tax returns.

Forming an LLC in Florida offers significant advantages, such as limited liability protection, which safeguards owners’ personal assets from business debts. Additionally, LLCs enjoy flexible taxation options. They can choose to be taxed as a sole proprietorship, partnership, or as a corporation, providing flexibility to optimize tax obligations based on the specific needs and strategies of the business.

When an LLC adopts an S corp designation, it still gets to enjoy the benefits of pass-through taxation and personal asset protection. But as an added benefit, S corp status lets an LLC pay its members as owner-employees, potentially getting a break on self-employment taxes. The rest of the business stays the same; only taxes are affect by S corp status. 

Get help establishing a Florida LLC with S corp tax election

Forming a business with or without S corporation election can be complicated, but we’d like to make it as easy for you as possible.

When you’re ready to make your move, we can help you form a Florida LLC with an S corporation designation and provide you with valuable support from our team of business experts.