For a Subchapter S corporation (S-corp) in Georgia, there are several tax filings and requirements you need to be aware of. An S-corp is a type of pass-through entity, meaning the business itself does not pay federal income taxes. Instead, the income, deductions, and credits pass through to the individual shareholders, who report them on their personal tax returns. However, there are still certain state filings and taxes to comply with in Georgia.
Here’s a breakdown of the key tax filings and requirements for an S-corp in Georgia:
1. Federal Tax Filings (IRS)
Even though Georgia has its own state requirements, your S-corp will still need to file the necessary federal tax forms:
Form 1120-S (U.S. Income Tax Return for an S Corporation): This is the main federal tax filing for an S-corp. It reports the S-corp’s income, deductions, and other financial information. It must be filed annually by the 15th day of the 3rd month after the end of the corporation’s tax year (usually March 15 for calendar-year taxpayers).
Schedule K-1 (Form 1120-S): Each shareholder will receive a Schedule K-1, which reports their share of the corporation’s income, deductions, credits, etc. The shareholder then reports this information on their individual tax return (Form 1040).
2. Georgia State Tax Filings
Georgia has its own set of tax rules for S-corps, though the treatment of the corporation itself is similar to federal rules (i.e., pass-through taxation). Here’s what you need to file for state taxes:
a. Corporate Income Tax (Form 600S)
Georgia does not impose a corporate income tax on S-corps. Since S-corps are pass-through entities, the income is generally not taxed at the corporate level. Instead, income, deductions, and credits are passed through to the shareholders, who report them on their individual income tax returns.
However, Georgia S-corps still need to file an annual Form 600S (S Corporation Income Tax Return), which reports the income, deductions, and credits passed through to the shareholders. This form is due on the 15th day of the 3rd month after the end of the S-corp’s tax year (usually March 15 for calendar-year filers).
b. Georgia Income Tax for Shareholders
Individual Income Tax: Shareholders of an S-corp must file their individual state income tax return and report their share of the S-corp’s income, deductions, and credits on their Georgia Form 500 (Individual Income Tax Return).
Shareholders’ Filing: The shareholders of an S-corp report their share of the business’s income on Schedule E of their individual Georgia tax return (Form 500). This is similar to how they would report the information from their Schedule K-1 (from the federal Form 1120-S).
c. Georgia Net Worth Tax (If Applicable)
Georgia imposes a net worth tax on S-corporations, which is based on the value of the corporation’s assets. For an S-corp, the net worth tax is applicable only if the corporation has more than $100,000 in assets. The amount of tax owed depends on the total assets of the corporation.
The net worth tax is reported and paid on Form 600. However, most small S-corps will not be subject to this tax unless they have significant assets.
d. Sales and Use Tax
If your S-corp is engaged in selling tangible personal property or certain services, you may need to register for sales tax and collect it from customers. This requires filing sales tax returns with the Georgia Department of Revenue (DOR). The frequency of sales tax filing depends on the volume of sales and may be monthly, quarterly, or annually.
3. Other Filings
Depending on your S-corp’s business activities, there may be other state and local filings to consider, such as:
Employment Taxes: If you have employees, you’ll need to withhold Georgia state income taxes from their wages and file payroll tax returns (e.g., Form G-7 for Georgia withholding tax).
Local Taxes: Some local jurisdictions in Georgia may impose their own business taxes, such as business licenses or local sales taxes, which will require separate filings.
4. Due Dates for Georgia Filings
Form 600S (S-corp tax return) is due on the 15th day of the 3rd month after the close of the S-corp’s tax year (March 15 for calendar-year filers).
Form 500 (Individual Income Tax Return) for shareholders is due on April 15 (for calendar-year filers).
Sales Tax Returns and Employment Tax Filings are due based on the filing frequency assigned by the Georgia Department of Revenue.
Leave a Reply