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So even though there is no statewide property tax, you’ll want to consider these municipal costs when calculating the tax burden you’ll face in Florida. Retirees don’t pay taxes on Social Security benefits, pensions or other retirement income, florida income tax and Florida has no estate or inheritance tax. Moreover, individuals in Florida are not subject to state income taxes. This means business owners in Florida are not taxed on income that passes through from their small business to themselves.

Other things to know about Florida state taxes

Florida’s homestead exemption is available to Florida homeowners and can be applied toward their principal residence. It exempts $25,000 of a home’s assessed value from property taxes, with an additional exemption of $25,000 for your home’s assessed value between $50,000 and $75,000 for non-school property taxes. Alaska does have one of the highest median property taxes in the U.S. at 1.19%, but the annual dividend check residents receive as part of the state’s oil earnings offsets those fees. Capital gains from investments and dividends are not taxed at the state and local level, another by-product of Florida not having a personal income tax. State income tax return deadlines usually mirror the federal deadline, but exceptions exist. Residents of Virginia, for example, generally get until May 1 to file their state returns.

It does not matter whether one is an employer, employee, or is self-employed; no tax is imposed on their income. The main source of revenue for the federal government is mainly from the property tax. There may be some additional municipal sales and tax charged in South Dakota counties and municipalities.

More Help Filing a Florida Tax Return as a Business

Information regarding these and additional taxes can be located from the list below. In addition to federal income tax, you will also pay Social Security and Medicare taxes on your earnings. These are together also known as FICA taxes and they fund the social programs that provide benefits for retirees, disabled people, and others. The current rates for these taxes are 6.2% for Social Security on wages up to $147,000 in 2022 and 1.45% for Medicare on all wages. If you have a high income over a certain threshold, you’ll also see a 0.9% Medicare surtax as well. Note that your employer will match these contributions (except for the surtax) and make payments too.

For satellite-based services like DirecTV, the rate is even higher at 11.44%. So if you are a big spender on high-speed internet, multiple phone lines and the top-of-the-line cable TV packages, expect a slightly higher price-tag when it comes time to pay up. As of 2023, the first $50,000 in income is exempt from Florida’s corporate tax.

state income tax rates and brackets

Before you get too excited about Florida’s lack of an income tax, remember that no state is entirely tax-free. You’ll still pay property taxes if you own a home in Florida, and other purchases you make will be subject to the state’s 6% base sales tax rate, plus any county sales taxes that may apply. Living in Florida or one of the other states without an income tax means your employer will withhold less money from each of your paychecks to pass on to tax authorities. But there’s no escaping federal tax withholding, as that includes both FICA and federal income taxes.

While individuals do not have to pay income taxes, the same is not true for all types of businesses in Florida. Corporations and artificial entities that conduct business, or earn or receive income in Florida, including out-of-state corporations, must file a Florida corporate income tax return unless exempt. Sole proprietorships, individuals, estates of decedents, and testamentary trusts are exempted and do not have to file a return.