Key 2025 Georgia Tax Updates Every Individual & Small Business Owner Should Know

As you’re thinking ahead to your next tax filing the changes in Georgia’s tax laws for 2025 are worth a look now rather than later. The state has moved early on several amendments that could affect how much tax you owe or how you plan for next year.

One of the key updates is the income tax rate for individuals. Georgia has reduced the flat personal income tax rate to 5.19% for the tax year beginning January 1 2025. That means if you are a Georgia resident you’ll be taxed at this lower rate rather than the prior higher rate once the new law is applied.

Another change is focused on the standard deduction and exemptions. The standard deduction has been increased, and the personal exemption has been largely repealed except for a dependent exemption of $4,000. The practical effect of this is that many taxpayers who file using standard deduction will see a larger base deduction to reduce taxable income.

There is also a one-time tax refund credit for qualifying Georgia residents. The state will provide a rebate of up to $500 depending on filing status and residency. If you lived in Georgia for the full year and filed timely returns you may be eligible and it is a good idea to confirm with your tax advisor.

For business owners and self employed individuals the law also updates the state’s conformity date to the federal Internal Revenue Code (for tax years beginning January 1 2024) and aligns corporate and personal tax rates. If you operate an S-Corp or LLC this means your state filing may closely mirror the federal treatment.

So what should you do now? First review your 2024 financials and tax estimates knowing the new rate will apply and the standard deduction has changed. Second if you have year end planning opportunities schedule a consultation to see how these changes may affect you. Third for our Southeast Georgia clients make sure IRS and Georgia state forms reflect the right rate and deduction amounts so you avoid surprises.

Keeping up with tax law changes can feel overwhelming but early planning helps. If you want a trusted CPA who understands Georgia tax law and works virtually for Southeast Georgia businesses and individuals reach out and we will walk through how these changes affect your taxes and what to do next.