If you're thinking about how to incorporate in Florida, you know that incorporation isn't only a tax planning trick. Incorporating often meshes with the image you want to present and the brand you're trying to build. Furthermore, even for very small owner-operated firms, incorporation should offer legal protection.

But all that said, you do want to harvest every available tax benefit--and sidestep common tax accounting blunders. Fortunately, you can typically enjoy the big benefits and avoid the big blunders by following three tips:

Tip #1: Verify that Forming a Florida Corporation Will Be Tax-free

A first, important tip--make sure that your incorporation qualifies for tax-free federal status. In other words, make sure that the very act of incorporating your business doesn't trigger income taxes to the incorporators.

Setting up a corporation can trigger federal taxes for the shareholders if the shareholders contributing property to the corporation don't control the corporation after the setup. And setting up a corporation can trigger taxes if people contributing stuff to the corporation contribute more liabilities than assets or offload personal liabilities into the corporation.

Note: A one-owner Florida business that incorporates should always meet the "control" requirement for tax-free incorporation if he or she owns 100% of the corporation after setup. Obviously, most business people should be able to avoid contributing personal liabilities (like personal credit card debt) to a corporation simply by exercising care. Accordingly, the real issue to watch during Florida incorporation is contributing fully depreciated assets like a car or equipment on which the business owner still owes debt. In this scenario, the incorporators may want to contribute additional assets or reduce the liabilities offloaded.

Tip #2: Look at the Florida S Corporation Option

Normally, corporations are taxed by the federal government on their profits at rates that quickly rise to 34% to 35%. But it gets worse: Florida's corporate tax laws hit regular corporations, too, with another 5.5% state corporation tax on profits.

Some small Florida corporations and their owners avoid the federal and state corporate income tax by withdrawing all of the corporation's profit as shareholder-employee salary. But that half-clever gimmick triggers another double tax: Paying out profits as salary to shareholders means that shareholders both pay income taxes on the salary and also payroll taxes (Social Security and Medicare) on the salary.

However, an S corporation (also known as a Sub S corporation or Subchapter S corporation) allows the corporation to avoid state and federal corporate income taxes and the shareholder to avoid payroll taxes on the non-salary part of the business profit.

Note: A Florida S corporation typically does not even need to file a Florida corporation tax return, the F1120, with the state's Department of Revenue.

Example: If a regular Florida corporation earns $100,000 in profit after paying the shareholder a fair wage, the corporation will pay roughly $22,000 of income taxes on the $100,000 of profit. When the corporation later distributes the profits (now only $78,000) the shareholder will again pay income taxes of perhaps $20,000. If the corporation opts for Subchapter S status, however, the corporation doesn't pay income taxes on the profits--only the shareholder (shareholders) does (do). The calculations can be a little complicated, but on $100,000 of profit, the tax savings would often be around $10,000.

Tip #3: Consider Getting a Tax Accountant or Tax Attorney's Help

If the stuff discussed in the preceding paragraphs seems a little too complicated to deal with on your own, you might want to get the help of a local, good tax attorney or a small business CPA who specializes in corporate taxation. Either professional can make sure that you avoid the traps and employ all the legal and tax accounting tricks related to incorporating your small business.

Adjunct tax professor Stephen L. Nelson teaches S corporation and LLC taxation in the graduate tax school of Golden Gate University and is the author of two downloadable do-it-yourself small business guides, How to Incorporate in Florida and Forming an S Corporation in Florida.