TAX NEWS - JUNE 2009

General Tax Questions FAQ - State of Georgia tax

Q. Will Georgia follow IRS Notice number 2004-54 relating to paid preparer signatures?

A. Yes. Using the IRS requirements, Georgia will permit paid preparers to sign original returns, amended returns, or requests for filing extensions by rubber stamp, mechanical device (such as signature pen), or computer software program. Also refer to Regulation 560-3-2-.27 "Signature Requirements for Tax Returns"


Q. How do I submit an address change?

A. The change can be submitted via email to ctaxreg@dor.ga.gov or you can call 1-877-GADOR11 (1-877-423-6711) .


Q. How do I obtain a copy of a Georgia income tax return?

A. Please call the Taxpayer Services Division at (404) 417-6760 for information on how to obtain a copy of your Georgia income tax return.


Q. Does Georgia have a section 529 college savings plan?

A. A plan was established in the 2001 Legislative Session by House Bill 417 and modified in the 2002 Legislative Session by House Bill 1434. Please click here for more information.


Q. If I itemize my deductions on my Federal Schedule A, can I deduct my auto registration and ad valorem tax?

A. Only the ad valorem tax portion of the annual auto registration can be deducted on your Federal Schedule A.


Q. The IRS is allowing preparers to apply for an alternative identification number that is used instead of a social security number. On a Georgia return, can a preparer use this number?

A. Yes, if the preparer sends us a copy of the IRS application for the number and a copy of the IRS notice that lets them know what the number is. This information should be sent to the following address:

Georgia Taxpayer Services Division
Directors Office
P.O. Box 49748
Atlanta, GA 30559

Please note that the preparer is not required to use this number. They can still use the federal identification number of their firm or their social security number.


Q. I itemized deductions on my federal return. What amount do I use on line 12 of my Georgia return?

A. Federal itemized deductions have to be reduced by taxes that are paid to states other than Georgia and for investment interest expense which is for the production of income exempt from Georgia income tax.


Q. What is the individual income tax rate?

A. Georgia has graduated rates with a maximum rate of 6 percent. Refer to the instruction booklet (IT-511) for additional information.


Q. I am claimed as a dependent on my parent or guardian's income tax return. Does Georgia allow me the personal exemption allowance?

A. If you are claimed by a parent or guardian on his/her federal return, you should claim one exemption for yourself on your Georgia return.


Q. Should I remove my Georgia income tax refund from my AGI?

A. No.


Q. Should I remove an income tax refund from another state from my AGI?

A. Yes.


Q. How do I treat Roth IRA's for Georgia purposes?

A. Roth IRA's are treated the same for Georgia purposes as they are treated for Federal purposes.


Q. I am a Georgia resident and a shareholder in a S-corporation operating in a state that does not recognize the S-election, therefore the income tax is paid by the corporation. How is this treated on the Georgia individual return?

A. An adjustment for this income can be made as a "Subtraction from Income" on the "Other Adjustment" line of schedule 1 of Form 500.


Q. In 1999, Tennessee expanded the type of entities that are subject to the Franchise and Excise tax. In addition to s-corporations, it now includes limited liability companies, limited partnerships, etc. As is mentioned in the previous question, a Georgia resident, who is a shareholder in an s-corporation operating in a state that does not recognize the s-election, can make an adjustment for this income on form 500 if the income tax is paid by the corporation. Does this adjustment also apply to a member of a limited liability company (that is treated as a partnership for Federal Income Tax purposes) or a partner of a limited partnership when the limited liability company or the limited partnership pays the Tennessee Franchise and Excise Tax?

A. Effective for tax years beginning on or after 1-1-06, an adjustment to income is allowed on form 500 for a member of a limited liability company or a partner of a limited partnership when the limited liability company or the limited partnership pays the Tennessee Franchise and Excise tax.


Q. What are my chances of being audited and what is the time frame for an audit?

A. Companies are selected on a random basis for audit. The DOR has 3 years after the filing of a return to audit a taxpayer. Tax may be assessed at any time in the case of a false or fraudulent return or a return filed with the intent to evade tax, or the failure to file a return. (See O.C.G.A §48-2-49).


Q. What is required if my tax return is chosen for an audit?

A. The auditor will ask to see supporting documentation for the income, deductions, exemptions and/or credits reported on the tax return. A taxpayer will receive notification that the return(s) have been selected for audit and generally an audit will be scheduled three to nine months after notification, allowing the taxpayer sufficient time to compile the supporting documentation.


Q. Does Georgia consider the Texas Margin Tax to be an income tax?

A. No. As such, an individual cannot subtract the amount taxed by Texas.