Atlanta

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Tax Information and Procedures

Basic knowledge about local, state, and federal taxes for employees and independent contractors in Atlanta.

Sections

1. Overview of the Tax System in Atlanta, Georgia

Atlanta, as part of the United States, follows the federal, state, and local tax systems. Taxes are levied at multiple levels:

  • Federal Taxes: Administered by the Internal Revenue Service (IRS).
  • State Taxes: Administered by the Georgia Department of Revenue (DOR).
  • Local Taxes: While Atlanta does not impose a city income tax, there are local sales taxes and property taxes.

2. Categories of Taxes

Here are the primary categories of taxes you should be aware of:

A. Income Taxes

  1. Federal Income Tax:

    • Progressive tax system with rates ranging from 10% to 37% based on income brackets.
    • Employers withhold federal income tax from your paycheck, and you may need to file an annual tax return.

  2. Georgia State Income Tax:

    • Georgia has a progressive income tax system with rates ranging from 1% to 5.75%.
    • Residents and non-residents earning income in Georgia must file a state income tax return.

B. Sales Tax

  • The combined sales tax rate in Atlanta is 8.9% (4% state tax + 4.9% local taxes).
  • This applies to most goods and services, with some exemptions (e.g., groceries and prescription medications).

C. Property Tax

  • Property taxes are levied on real estate and personal property (e.g., vehicles).
  • The property tax rate in Atlanta varies by county (Fulton or DeKalb County) and is based on the assessed value of the property.

D. Payroll Taxes

  • Employers deduct Social Security (6.2%) and Medicare (1.45%) taxes from your paycheck, matched by the employer.
  • Federal Unemployment Tax (FUTA) and State Unemployment Tax (SUTA) are also paid by employers.

E. Self-Employment Tax

  • If you are self-employed, you are responsible for paying both the employer and employee portions of Social Security and Medicare taxes (15.3%).

F. Other Taxes

  • Capital Gains Tax: Applies to profits from the sale of assets.
  • Estate Tax: Georgia does not impose an estate tax, but federal estate taxes may apply.
  • Excise Taxes: Levied on specific goods like alcohol, tobacco, and gasoline.

3. Tax Filing Procedures

Here’s how to file taxes in Atlanta:

A. Federal Tax Filing

  1. Obtain a Taxpayer Identification Number (TIN):

    • Most individuals use their Social Security Number (SSN). Non-residents may need an Individual Taxpayer Identification Number (ITIN).

  2. Choose a Filing Status:

    • Options include Single, Married Filing Jointly, Married Filing Separately, Head of Household, or Qualifying Widow(er).

  3. Gather Necessary Documents:

    • W-2 forms (for employees).
    • 1099 forms (for contractors or freelancers).
    • Receipts for deductions (e.g., charitable donations, medical expenses).
    • Form 1040 (federal tax return).

  4. File Online or by Mail:

    • Use IRS Free File (if eligible) or commercial software like TurboTax or H&R Block.
    • Paper forms can be mailed to the IRS.

B. Georgia State Tax Filing

  1. Register with the Georgia Department of Revenue:

    • Create an account on the Georgia Tax Center (GTC) website.

  2. File Your State Tax Return:

    • Use Form 500 (Individual Income Tax Return) or Form 500EZ (simplified version).
    • File online via the GTC or mail paper forms to the Georgia Department of Revenue.

  3. Pay Taxes Owed:

    • Payments can be made online, by check, or through electronic funds transfer.

C. Deadlines

  • Federal Tax Deadline: April 15 (or the next business day if it falls on a weekend/holiday).
  • Georgia State Tax Deadline: Same as the federal deadline.

D. Extensions

  • You can request a six-month extension for federal and state taxes, but any taxes owed must still be paid by the original deadline to avoid penalties.

4. Costs of Filing Taxes

  • DIY Filing: Free to low-cost options are available for simple returns (e.g., IRS Free File for incomes under $73,000).
  • Tax Software: Costs range from $20 to $100+ depending on the complexity of your return.
  • Professional Tax Preparers: Fees range from $150 to $500+ depending on the complexity of your taxes.

5. Important Local Considerations

  • Residency Status: Your tax obligations depend on whether you are a resident, non-resident, or part-year resident of Georgia.
  • Workplace Location: If you work in Atlanta but live in another state, you may need to file taxes in both states.
  • Tax Credits: Georgia offers credits such as the Child and Dependent Care Tax Credit and the Low-Income Credit.
  • Sales Tax Exemptions: Certain items, like groceries, are exempt from local sales taxes.

6. Resources and Offices for Assistance

Here are some resources to help you with tax-related questions and filing:

A. Federal Tax Resources

  • Internal Revenue Service (IRS):
    • Website: www.irs.gov
    • Phone: 1-800-829-1040
    • Local Office: Atlanta IRS Office, 401 W Peachtree St NW, Atlanta, GA 30308.

B. Georgia State Tax Resources

  • Georgia Department of Revenue (DOR):
    • Website: dor.georgia.gov
    • Phone: 1-877-423-6711
    • Local Office: 1800 Century Blvd NE, Atlanta, GA 30345.

C. Free Tax Assistance

  • Volunteer Income Tax Assistance (VITA):

    • Free tax help for individuals earning $60,000 or less, persons with disabilities, and limited English speakers.
    • Find locations: irs.treasury.gov/freetaxprep.

  • Tax Counseling for the Elderly (TCE):

    • Free tax help for individuals aged 60+.

D. Professional Tax Preparers

  • Certified Public Accountants (CPAs) and Enrolled Agents (EAs) in Atlanta can assist with complex tax situations. Look for professionals accredited by the IRS or the Georgia Society of CPAs.

7. Employment-Related Tax Insights

  • W-4 Form: When starting a job, you’ll complete a W-4 form to determine how much federal income tax your employer should withhold.
  • 1099 Workers: If you’re a contractor or freelancer, you’ll receive a 1099 form instead of a W-2 and must pay estimated taxes quarterly.
  • Unemployment Benefits: These are taxable at both the federal and state levels.
  • Employee Benefits: Some benefits (e.g., health insurance, retirement contributions) may reduce your taxable income.

8. Tips for Navigating Taxes in Atlanta

  • Start Early: Gather documents and begin preparing your taxes well before the deadline.
  • Keep Records: Maintain organized records of income, expenses, and deductions.
  • Use Tax Software: Simplify the process with reputable tax software.
  • Seek Professional Help: For complex situations, consult a CPA or tax attorney.

By understanding these tax categories, procedures, and resources, you’ll be well-prepared to manage your tax obligations in Atlanta, Georgia. Let me know if you need further clarification or assistance!