Georgia Title Ad Valorem Tax

If you buy a new or used car in Georgia, you have to pay this tax which is a substantial 7% of the fair value of the vehicle. You also have to pay it if you bring a car into Georgia from another state and you want to get a Georgia tag. By paying this tax you no longer have to pay the annual ad valorem tax or any sales tax. From an income tax standpoint the title ad valorem tax is a nondeductible cost which adds to the basis of the vehicle.

529 Plan

A 529 Plan is a great way to put aside funds for your kids' college expenses for tuition, fees, books, supplies, and equipment. You don't get a tax deduction for contributions but the accounts grow tax free. You can also now use up to $10,000 per year from the 529 plan for kindergarten through 12th grade tuition per student. Contributions are not limited by taxpayer income and are considered gifts to your children. Georgia gives you a tax deduction for up to $4,000 per year per beneficiary for joint income tax returns if you invest in the Georgia Path2college 529 plan.

Social Security Wage Base for 2019

The social security wage base for this year is $132,900 meaning the max amount withheld from your paycheck will be $8,239.8 (132,900 x .062) for social security(FICA) up from $7,960.80 for 2018. The 2020 wage base will be $136,800. To show you how far this has grown, the initial social security wage base from 1937 to 1949 was $3,000 and the tax rare was only 1% for a big $30 a year.

Secure Act of 2019

The House of Representatives passed this act in May 417-3. It has not been passed by the Senate yet. This act increases the mandatory age for required minimum distributions (RMD) for retirement accounts from age 70 and 1/2 to age 72. The down side to this act is that it requires non spouse beneficiaries of inherited retirement accounts to take distributions over a ten year period instead of over their life expectancy. This means that the account will not be allowed to grow tax free over a long period of time like it is now. I hope it doesn't go through in its present form.

Capital Loss Carryover from a Deceased Spouse

A deceased spouse's capital loss carryover from their own separate property can't be used after the final joint return. The capital loss carryover dies with the deceased. If the capital loss came from jointly owned property, then the surviving spouse can claim half of the loss carryforward. This is another reason for spouses to hold property in joint ownership.

More Opportunity Zone Info

If you are an individual partner in a pass through entity, you have the option of investing your capital gains into an opportunity zone investment within 180 days of the entity's gain realization or 180 days after the year end of the entity. This gives you a lot of flexibility in tax planning which is always a good thing.

Dealing with the State of Georgia

If you get a notice from GA about your tax return, the first thing to do is send it to me to review. You can also go online to the Georgia Tax Center and respond to the notice there and even upload supporting documents. It is very difficult to get someone on the phone at the Georgia Department of Revenue, but if you have to call, the number is 1-877-423-6711.