Film Tax Credits Could Save You Money

Hollywood has come to town, and it could mean more for your bottom line. As Georgia seeks to lure high budget films to the state, local taxpayers (as well as any taxpayer, regardless of residency, who have a state of GA tax liability) can also benefit by purchasing Film Tax Credits.

Purchased at 87 cents on the $1, these credits are treated the same as tax payments, making them particularly useful if you have or will be assessed penalties for late payment, late filing or underpayment of estimated tax penalties.

Below are some details on how these tax credits work:

• Credits can replace W-2 state tax withholdings, state estimated tax payments, extension payments and more.
• Credits are freely transferable, meaning HHM will arrange for the acquisition of the film credits directly from the production/film company.
• Even if you've filed your 2011 tax returns, HHM can still acquire 2011 state tax credits, amend returns and generate a refund. Taxpayers who've not filed 2011 returns can acquire tax credits and apply them toward their 2011 liability.
• For 2012, HHM can acquire 2012 tax credits allowing you to cease W-2 state tax withholdings or quarterly payments, which can save time and free up cash flow.
• Unused credits can be carried forward up to five years. NOTE: Credits will be applied against state tax liability before application of withholdings, estimated tax payments, etc., usually resulting in a refund.

Example:

Taxpayer X, an individual, is a Georgia resident with substantial Georgia income resulting in a 2011 state tax liability of $20,000. During 2011, this taxpayer has made no state tax payments, resulting in late payment interest and penalties, as well as underpayment penalties, totaling an additional $3,000.

On October 12, 2012, taxpayer acquires $20,000 of 2011 state of Georgia tax credits for $17,400. HHM prepares and files his individual tax return and no balance is due.

Taxpayer X saved $5,600 ($20,000 tax liability + $3,000 in penalties and interest less $17,400 purchase price for credits).

If you are interested in taking advantage of this valuable program, please contact Kevin Rose at 423.702.8392. HHM specializes in tax advisory services, and we would be happy to review your current situation, show how recent tax changes may affect you, and suggest tax-smart ways to achieve your short-and long-term financial goals.