How Taxes Affect You in Ormond Beach, Florida
There are many reasons why retirees and people from all over the nation flock to the Sunshine State. In addition to beautiful beaches and gorgeous weather year-round, Florida offers many tax advantages. For starters, there is no state income tax for individuals. Sales and property taxes are also lower than in other areas of the country, and the city of Ormond Beach even made it onto the top 10 list of budget retirement cities.
Individuals do not have to pay income tax in Florida. That’s one of the tax greatest advantages the state has to offer. Depending on where you’re from, this can result in significant savings and drastically reduce your cost of living. If you’re running a partnership or Limited Liability Company and select to have your earnings taxed at the individual level, you won’t have to pay income taxes, either. Corporations must pay state income taxes in Florida. At 5.5%, this income tax is low compared to many other states. Your accountant can also help you use available deductions and exemptions to lower your tax rate even more.
Florida has a reasonable sales tax rate of 6% at the state level. Depending on where you live, local taxes will be added onto it. For example, Volusia country has a 0.5% sales tax rate whereas the city of Ormond Beach doesn’t add any additional sales tax on a city level. If you purchase an item in Ormond Beach, you can therefore expect to pay 6.5% sales tax.
If you’re running a business, you’ll want to hire a CPA to help you collect sales tax from your customers and file the necessary returns with the state and county. Your accountant can also help you figure out if any of the sales tax you pay is deductible on your tax return and how to best keep track of these amounts.
Florida is a great place to live, because home prices are very reasonable. The median home price in the Ormond Beach area is only $108,900 with property taxes at around $1161. When you combine these numbers with the fact that you don’t have to pay personal income taxes, the cost of living is much lower than in other areas of the country. Therefore, it’s not surprising that many people choose to retire in Florida.
Property taxes vary for each county. Typically, homes in Flagler County have the lowest property tax rates, but you can find many great deals in Volusia County as well. Overall, the housing market in Ormond Beach is still very favorable. As far as deducting your property taxes on your tax return, you’ll probably find a few differences with the most recent changes to the tax code. While deductions are still allowed, fewer homeowners will benefit from itemizing because the standard deduction has increased.
If you have rental property, you can still deduct property taxes from your rental income. Your accountants can help you file the right forms to decrease your taxable income. One advantage of investing in rental properties is that you may even be able to deduct a loss on your personal tax return, whereas that’s usually not the case for other types of investments.
Running a Business
Although many people come to Ormond Beach to retire, there are plenty of others who want to start their own business. While the startup costs vary depending on the type of business you’re operating, the filing fees the state of Florida charges are reasonable. For example, you only have to pay $125 to start an LLC within the state of Florida.
Whether you’re starting a new business or transferring an existing business to Florida, it’s important to hire an accountant to help you get the financial records straight. For example, you’ll be required to collect and charge sales tax in Florida. If you have employees, your accountant can take care of the payroll requirements for you. While you don’t have to withhold state income tax for your employees, you must collect federal income tax withholdings, social security, and Medicare.
As you can see, taxes don’t have to be a big burden for Ormond Beach residents. At Camputaro & Associates, we’ll handle your tax returns and answer any other tax questions that you may have along the way. And while it’s important to file your income tax returns in a timely manner, you should also set yourself up for a better future by letting us handle your business bookkeeping and personal estate planning.
Camputaro and Associates
Certified Public Accounting Firm
136 N. Orchard Street, Suite 8
Ormond Beach, FL 32174