Many businesses find it favorable to expand into Georgia. This is mainly due to the state’s lower corporate tax obligation. After all, it has a 5.49% individual income tax rate, and a 5.75% corporate income tax rate.
By understanding the cost of apportionment, you can accurately report your earnings to the IRS and local government.
Corporations
- Filing Requirements. If your corporation owns property in the state, does business there, or gets income from Georgia sources, you must file a Georgia income tax return.
- Allocation & apportionment. The state uses the gross receipts factor for revenue received from customers within the state.
Partnerships
Filing Requirements. If you are required to file a Federal Income Tax return on Form 1065, you must also do so for Georgia. This means partnerships, LLCs, joint ventures and unincorporated organizations doing business or who own property in Georgia. But this includes companies with members living in Georgia, or earning income from Georgia sources. A Georgia Income Tax return is done using Form 700.
Employees & individual filers
Filing requirements. If you are a non-resident working in Georgia and you have to file a Federal return, you’ll need to do the same in the state. In addition, you must file a return if you earn income from state sources, like wages, lottery winnings, or from flow-through entities.
However, legal residents of other states don’t need to file a Georgia tax return in two cases, depending on which is lower:
- Your financial gain in Georgia was from performing services for wages not exceeding five percent of your income.
- You earned less than $5,000 in the state over the taxable year.
Ensuring Accurate Tax Filings
Consulting an expert CPA can help you keep a handle on different laws and tax implications.
Fusion CPA has a team of certified public accountants who are highly skilled in handling multi state taxes. We’re positioned to help you take the stress out of tax season, so you can focus on what really matters.
To see how we can help you with a proactive tax strategy to save you time and money, schedule A Discovery Call with one of our CPAs.
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