2018 is closed. Your taxes are in the capable hands of your CPA, or already complete. So what’s next for the business who is on top of their bookkeeping game? Tracking their business property! Most localities require you to report all business property that you keep at your business location. Sure, this means your computers and big equipment. But it also includes all the other stuff that may not need to be on your depreciation schedule. It includes your bookcases and tables and file cabinets and printers. Basically all of the “stuff” you actually have and keep at your office.
Your local government will ask you to report how much property you keep, and based on that, they will issue an unsecured property tax bill to you over the summer. Some localities will exempt small businesses – San Francisco for example only requires you to file a 571-L form if you the aggregate cost of your business property is $100,000 or more, or if they sent you the form (likely based on a prior year’s requirement). So many micro-businesses will end up being exempt from this filing.
If you are required to file, keep in mind that you can make your life a whole lot easier by maintaining a property inventory throughout the year. You can record any purchases throughout the year, and also note any items that were “retired” or disposed of during the year. That way, when the time rolls around to file again you can simply supply the required totals.
Note that this is also great back-up information to have prepared and shared with your CPA. Generally, they will be very impressed that you maintain this, and can use this to cross-reference against the depreciation schedule contained in your annual tax return.
If you haven’t maintained an inventory before, start now! You can prepare this year’s filing information and then determine a fast and easy way to keep this updated periodically throughout the year.
ZümiFi – always looking for opportunities to simplify your bookkeeping and reporting requirements!