The great weather and booming economy are enough to bring many new businesses and residents to the state of Georgia. However, the headaches that can come with understanding taxes and the requirements for starting a business may deter some people from creating the business of their dreams.
Regardless of the size of your business, if you operate a limited liability company (LLC) in Georgia, you’ll need to ensure you stay up to date on your finances and pay federal, state, and local taxes. Our guide will help you understand which taxes you must pay for your Georgia LLC.
Recommended: Schedule a free consultation with an accountant to stay on top of your taxes.
Georgia LLC Taxes Owed
LLCs benefit from pass-through taxation, which means the business’s profits pass through to the members’ individual tax returns. This results in the LLC owners paying taxes on their portion of the income generated by the LLC rather than the LLC itself paying taxes.
In Georgia, LLC owners can expect to pay the following taxes:
Regardless of where your business is located, if you have an LLC within the United States, you will have to pay federal income taxes and federal self-employment taxes. These taxes are reported on your Form 1040.
Federal Self-Employment Taxes
It doesn’t matter if your LLC is a single-member LLC or a multi-member LLC; all LLC members must pay self-employment taxes on their share of the LLC’s profits. The self-employment tax rate is 15.3%.
Federal Income Taxes
Your federal income taxes will depend on your tax bracket, and the cutoffs for individual tax brackets, as well as the percent owed, will change each year.
Georgia State Taxes
Each state has its own laws that dictate how it taxes individuals and businesses. Below you’ll find some important information about taxes on the state level in Georgia.
Georgia Income Taxes
The income tax rate for a business in Georgia is 5.75%. For comparison, the average income tax rate for businesses across other states is around 6%. This puts Georgia just under the standard for businesses across the nation.
For more detailed information about this state’s income tax rates, visit the Georgia Department of Revenue website.
Georgia Sales and Use Tax
Georgia’s state sales tax rate is 4%. While this isn’t too high when compared to other states, it may increase based on the purchase location. Some Georgia counties and cities impose their own sales taxes, which average out to 3.35%.
To learn more, refer to the sales tax rates listed on the Georgia Department of Revenue website.
File for a Sales and Use Tax Return in Georgia
If your business sells taxable goods or services, you must register with the Georgia Department of Revenue. By doing so, you’ll also be filing a Sales and Use Tax Return to ensure your business meets the requirements set by the state.
Visit the Georgia Department of Revenue website for more information.
Additional State Taxes
The Georgia Department of Revenue also oversees the collection of various state-specific taxes that businesses may have to pay, depending on their location, industry, and number of employees. Here are a few examples of these additional taxes:
- Alcohol Tax
- Fireworks Excise Tax
- Motor Fuel Tax
- International Fuel Tax
- Tobacco Tax
Visit the Georgia Department of Revenue website to see the full list of business taxes and other information about paying these taxes.
Georgia Local Taxes
The local laws and ordinances in Athens may differ greatly from those in Atlanta. Regardless of where you live in Georgia, check with your local jurisdiction to ensure your business obtains the proper local permits and follows any local regulations that may impact its operations.
Atlanta Local Taxes
The county sales tax rate in Atlanta is 4.9%, making the total sales tax within the city 8.9%. Atlanta has the highest sales tax rate of any city in the state of Georgia.
Fulton County, the county in which Atlanta resides, also offers tax credits to some businesses that meet certain criteria. For more information about Fulton County and Atlanta taxes, visit the Fulton County website.
Georgia LLC Compliance
LLCs must obey Georgia’s state and local laws in order to maintain their business in good standing. While Georgia LLCs technically don’t file state taxes, they must still file an annual report each year with the state.
Georgia LLC Annual Registration Fee
All LLCs in Georgia must pay a $50 annual registration fee to the Georgia Corporations Division. The state uses this fee as a way to collect accurate contact information from your business.
You must pay for your LLC between Jan. 1 and April 1 every year it’s in business. You can make your payment online or by mail. If you miss the deadline and pay after April 1, the state will charge your LLC an additional $25. To register, visit the Georgia Corporations Division website.
If you want to learn more you can visit our Georgia LLC Annual Registration guide.
LLC taxes are complex. While our guide can provide you with important information, we recommend you schedule a free consultation with an accountant to ensure you handle your business taxes correctly.