FAQ

Yes. Alabama residents and anyone earning income in Alabama must file an Alabama state income tax return using Form 40. The Alabama Department of Revenue (ALDOR) administers these returns.

The combined sales tax rate in Athens is approximately 9% — that includes 4% state, 3% city, and 2% county tax. Rates may vary slightly depending on the exact address and business type.

You can check your refund status online at the Alabama Department of Revenue Refund Tracker. You’ll need your Social Security number and filing status.

The IRS recommends keeping records for at least three years after filing, or seven years if you file a claim for a loss or bad debt. Businesses should keep payroll records for at least four years.

If your income sources, deductions, or business activity are complex, working with a CPA in Athens, Alabama ensures you maximize deductions and remain compliant with both IRS and Alabama state laws.

Look for credentials such as CPA (Certified Public Accountant) or EA (Enrolled Agent). Ask about experience with Alabama returns, small business filings, and IRS representation. Our firm is fully licensed and led by a Certified Public Accountant (CPA), so you can trust that your taxes are handled with professional expertise and accuracy.

Property taxes are handled by the Limestone County Revenue Commissioner’s Office. Taxes are due October 1st and delinquent after December 31st each year. Payments can be made online, by mail, or in person.

Yes. Homeowners may qualify for a homestead exemption that reduces property tax liability on their primary residence. Applications are filed with the Limestone County Revenue Office.

You can still file on time and request a payment plan with the IRS or Alabama Department of Revenue. Both agencies allow monthly installment agreements to avoid more severe penalties.

The IRS may assess a failure-to-file penalty (usually 5% per month of unpaid tax) and interest on unpaid balances. Alabama applies similar penalties.

Yes. You can pay individual and business taxes securely through My Alabama Taxes.

Alabama does not tax Social Security benefits.

Yes. Alabama follows similar dependency rules as the IRS. You can claim children or qualifying relatives who meet income and residency requirements.

Single-member LLCs are generally taxed as disregarded entities, meaning their income is reported on the owner’s personal return. Multi-member LLCs file a partnership return (Form 65) and may owe Business Privilege Tax annually.

Maintain organized records for income, expenses, invoices, receipts, payroll, and mileage. The IRS recommends keeping most records for at least three years, and payroll records for four years. Digital backups are acceptable if they are clear and complete.

If your business sells taxable goods to Alabama residents, you are required to collect Alabama sales tax.

If you expect to owe more than $500 in Alabama income tax (or $1,000 federally) when you file, you should make quarterly estimated payments in April, June, September, and January. This helps you avoid penalties for underpayment at year-end.

Yes, if the vehicle is used for business purposes. You can deduct actual expenses (fuel, maintenance, insurance) or use the standard mileage rate (set annually by the IRS). Keep a mileage log or app records to substantiate the deduction.

A 1099 contractor is self-employed and responsible for their own taxes, while an employee works under your direction and is subject to payroll tax withholding. Misclassifying workers can result in fines and back taxes, so it’s important to use the correct classification.

The method depends on your business structure:

• Sole proprietors and single-member LLCs take an owner’s draw.

• S-corp owners take a reasonable salary and may receive distributions.

• Partnerships pay partners through guaranteed payments or distributions.

  Your CPA can help structure payments for compliance and tax efficiency.