S corporation shareholders can reduce their tax liability by making a contribution to the Apogee Scholarship Fund, a Georgia tax credit scholarship program.
The Georgia House Bill 1133 tax credit program administers the Georgia Registered Student Scholarship Organization by providing an opportunity for S corporation shareholders to redirect their tax dollars. You can reduce your portion of taxable income by funding the Apogee tax credit up to 75 percent of the Georgia tax liability funded by your business. If you are unsure about the tax compliance of charitable giving, it may be helpful to look into outsourced accounting and tax controller services. Give to an educational cause that helps tens of thousands of students, including those entering first grade, kindergarten, and Pre-K.
With the latest legislation on the tax treatment at the state level for S corporations, HB 149 allows you to fund your Georgia tax liability at your business level. It does not include your W-2 income, but it creates an ordinary business expense that reduces taxable income. Learn what tax breaks you can receive through the Georgia education tax credit and the benefits for S corporations and taxpayers.
How You Can Participate in the Apogee Scholarship Fund
The basis of your total tax credit is your total Georgia tax liability, which is six percent of your Georgia adjusted gross income. You can contribute to the tax credit scholarship program on Apogee’s website by completing an online form and submitting your payment using your credit card. If you prefer mailing your payment using a check or other financial instruments, print and fill out the online form and mail addressed to Apogee provided on the website. December 15th is the last day to apply online and receive Georgia tax credits for the income tax payable to the state of Georgia for that tax year.
Five Benefits of the Georgia Apogee Tax Credit
Implementing accounting software and outsourcing to a CPA knowledgeable of Georgia legislation can help you receive all the benefits of the Apogee Tax Credit. According to Code Section 48-7-23(a), net income computation cannot include deductions on charitable contributions. Qualifying as a passthrough taxpayer requires the individual to be a shareholder, LLC member, partner, or a qualified taxpayer receiving income from the following business structures:
- S corporation
- Limited Liability Company (LLC)
- Partnership
1. Passthrough a maximum of $10,000 yearly for each shareholder with dollar-for-dollar apogee scholarship tax credit.
2. Reduced Georgia tax liability for passthrough taxpayers by the paid amount of the contribution, which applies to quarterly estimated tax liability payments.
3. Couples filing a joint Georgia tax return who are owners in an S corporation can each contribute $10,000 to the Georgia tax credit scholarship, for a total of $20,000.
4. Claim the amount you pay to the Apogee tax credit as a business expense deduction.
5. With monetary funding already allocated towards your Georgia tax liability, you will make an important impact when supporting your selected private school.
Permitting itemized taxpayers to deduct specific taxes paid to state and local governments is the SALT (State & Local Tax) deduction. The Tax Cuts & Jobs Act (TCJA) placed a cap at $10,000 per year on sales tax or property taxes and state income. Passing taxable income involving Georgia tax liability to the S corporation benefits shareholders.
SALT enables you to receive the benefit when itemizing deductions on federal income tax returns and provides a way for states to collect more taxes while using the Federal benefits. Tax relief for S corporations not only benefits businesses but also passthrough taxpayers who itemize their deductions by taking advantage of tax breaks such as property taxes and charitable contributions. Joint federal income taxpayers have more benefits because the Georgia education tax credit cap is $20,000.
When searching for outsourced accounting & tax services, Fusion CPA has a team of Certified Public Accountants and controllers who are experienced with Georgia legislation, taxation, and integrated accounting software. We can help S corporations, LLCs, Partnerships, and passthrough taxpayers to reduce their tax liabilities when financially contributing to the Georgia tax credit scholarship program. Our CPAs will set up or upgrade accounting software for your organization and complete federal tax returns to ensure you receive your tax credits.
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This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written, and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.