The start of a new year is an opportune time to take inventory or your business property and determine what you can do to trim the taxes owed on those assets. A handful of strategies exist to help on that front, some easier to accomplish than others.
For the most part, the personal property tax area is one that gets short shrift, says Joe Huddleston, a partner with accounting firm Grant Thornton LLP in Nashville, Tennessee. Too often, notes Huddleston, business owners overlook the tax impact of acquiring equipment and property for their businesses. "Businesses capitalize these items for federal tax purposes," he says. "Once they've done this, the equipment goes on a company's fixed-asset rolls and business owners begin to pay personal property taxes on the assets. Too often, that's the last time anyone considers them."
But regularly auditing these assets and properly classifying them can save you money. Too few business owners realize, Huddleston points out, that it's possible to trim a company's overall property tax rate by 5 to 15 percent annually if an effective tax auditing plan is put into effect.
Joan Szabo is a writer in Great Falls, Virginia, who has reported on tax issues for more than 14 years.