FREQUENTLY ASKED QUESTIONS
VALDOSTA STATE UNIVERSITY
SMALL BUSINESS DEVELOPMENT CENTER
Do I need a state tax ID number and how do I obtain one?
Any small business that operates in the state of Georgia may be required for one or more tax-specific ID numbers. These may include Sales & Use tax, employee withholding tax, international fuel tax agreement, motor fuel distribution, coin-operated amusement machines, alcohol and tobacco. For additional information on business registration and contact information, click on reference. All employers are also required to have a Georgia Department of Labor number in order to pay State Unemployment Insurance on behalf of their employees. Applications are available on-line or through your local Department Of Labor office.
Do I need a Federal Employer Identification number?
Your business needs an EIN if it has employees, has a Keogh Plan, or files one of the following tax returns: excise, fiduciary or alcohol, tobacco and firearms. A sole proprietor with no employees and none of the other items listed above may still need an EIN for fraud protection, contracts procurement and some loan programs. To apply for a Federal EIN, fill out Federal Form SS-4.
What is the self-employment tax? Do I have to pay it?
Sole proprietorships and partnerships that report a profit are required to pay self-employment tax in lieu of Social Security and Medicare contributions. Self-employed persons may be required to make quarterly deposits of estimated federal and state taxes based on the profits of the business. For specific information, contact an accounting professional.
Are there local business taxes?
All businesses operating in Georgia are required to pay property (ad valorem) taxes on real and personal property of the business. Property taxes are assessed and collected by individual counties. The Georgia Department of Revenue web site ( www.gatax.org ) has links to local tax offices through the State Property Tax Division.
What business expenses can I deduct?
The IRS states that in order for an expense to be deductible, it must be ordinary and necessary in conducting the business. There are many rules as to the documentation that must be provided to maintain the deductibility of an expense. For assistance in clarifying these rules, contact an accounting professional or refer to IRS Publication 535.
Do I need to collect sales tax?
Yes. If you sell or rent tangible items to the final consumer, you must collect and remit sales and use tax. There are certain types of sales which are exempt. For more information, click on reference.
How do I find a good CPA?
In choosing an accountant it is important that you consider an individual that possess a good working knowledge of your business as well the accounting software package that you are currently using or plan to use. Also ensure that that the prospective accountant has a large small business clientele. Check references from at least three current clients and also make sure that this individual is board certified to practice in the state of Georgia.
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