Florida Self-Employment Tax

Florida is a popular place for small business owners to open up shop, thanks to favorable tax laws. However, new entrepreneurs must understand which state and local taxes they will have to pay in order to optimize their bottom line. Individuals who work for themselves, including freelancers and contractors, must pay self-employment (SE) tax on their net earnings. SE tax is similar to the Social Security and Medicare taxes withheld from the paychecks of most wage earners. Florida Self-Employment Tax Rate is the same as the federal rate, which is 15.3%. This includes a 12.4% tax for Social Security and 2.9 percent for Medicare. Self-employment tax is separate from income tax, which is levied on your personal earnings.

Small business owners in Florida must also charge and remit county-based sales tax on their goods and services. This tax applies to items such as fuel, cell phones, and alcohol. In addition, sole proprietors and members of LLCs must pay a federal self-employment tax of 15.3%, plus Florida’s 6% sales tax on their net business income. This includes income from ride-hailing apps and from performing in-home services for elderly or disabled individuals (caregivers). S corporations and C corporations are shielded from Florida’s state income tax, but their owners must pay federal income tax on the pass-through business profits they receive.

Sales and Use Tax in Florida

Self-employed individuals in Florida who sell goods, certain services, or conduct sales-related business activities must register to collect and remit sales tax. Florida’s general state sales tax rate is 6%, but county surtaxes can apply, which vary by county and can add up to an additional 2.5%.

• Any self-employed individual who sells taxable goods or services in Florida must collect sales tax and file it with the Florida Department of Revenue.
• Sales and use tax in Florida are reported and filed using the Sales and Use Tax Return (Form DR-15).
• The due dates for sales tax returns depend on the assigned filing frequency (monthly, quarterly, semiannually). Typically, returns are due on the 1st and late after the 20th day of the month following the collection period.

Corporate Income Tax in Florida

While this does not directly apply to individual self-employment income, self-employed individuals who operate their businesses as S corporations or C corporations must pay Florida’s corporate income tax. The rate is generally 5.5% on federal taxable income, with adjustments specific to Florida.

How to Pay Florida SE Tax?

SE Tax is a Social Security and Medicare tax on taxable earnings primarily for people who work for themselves. It is similar to the FICA (Federal Insurance Contributions Act) tax employers withhold from employees’ paychecks.

Taxpayers must use the Electronic Federal Tax Payment System to make these deposits. Deposit due dates are often different from the filing due dates for returns. If a deposit due date falls on a weekend or legal holiday, the deposit is due the following business day.

In addition to federal income tax and self-employment tax, the state of Florida collects a variety of local taxes, including use tax, a county-based discretionary sales surtax and unemployment tax payments. Learn more about these local tax requirements by visiting the Department of Revenue’s website.