2022 is closed. Your taxes are in the capable hands of your CPA or already complete. So what’s next for the business on top of its bookkeeping game? Tracking their business property! Most localities require you to report all business property you keep at your 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, tables, file cabinets, and printers—basically all of the “stuff” you have and keeps at your office.
Your local government will ask you to report how much property you keep; 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 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). This is because so many micro-businesses will be 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. For example, you can record purchases throughout the year and note any items that were “retired” or disposed of during the year. That way, you can supply the required totals when the time rolls around to file again.
Note that this is also great backup 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!