When companies are searching for ways to decrease what they owe in taxes, they may overlook personal property. Monitoring equipment in your possession, keeping track of items that are lost or broken, a having a watchful eye on your inventory and more may seem like a tedious process. And many companies are unfamiliar with the impact that personal property has on what they owe in taxes.
Effective management of your personal property could ease your tax burden. Find out four ways to unlock savings and improve your personal property tax management.
4 Ways To Save On Your Personal Property Taxes
Driving savings on your personal property taxes is easy, if you know how to manage them. Find out four essential steps you should take to improve how your personal property is managed.
- Focus on your asset listing. Asset listings can be outdated or inaccurate, because they’re not the most important thing you have to do everyday. But if your asset listing is not detailed and up to date, you could be at risk of paying more than necessary in personal property taxes. Remove all ghost assets – assets that are still on your listing, but no longer in the possession of your company – so you no longer have to pay taxes for them.
A best practice for keeping your asset listing updated is to input all purchases as you make them, and remove items from the listing when you no longer possess them. Do regular checks of your asset listing to ensure that the status of all items on there is current.
- Monitor your inventory. Like your assets, inventory plays an important role in determining what you owe in personal property taxes. Items like raw materials, packaging, supplies, completed products and in-progress products should be carefully tracked and documented.
You may also be located in a state that has a Freeport Inventory Exemption. Generally, certain business inventory manufactured in the state is exempt from property tax if it is shipped out of state within 12 months. If you think your inventory could fall under a Freeport Inventory Exemption, check with your state to make sure. Next, file all the necessary paperwork by the deadline to qualify for this. You’ll have to keep your records meticulously to determine what personal property falls under this tax exemption and what doesn’t.
- Go green. Adopting sustainable practices across your commercial real estate portfolio could also help to cut your personal property taxes. Many jurisdictions offer tax breaks or exemptions for companies that invest in equipment that lowers carbon emissions, take steps to save energy or adopt other environmentally friendly practices.
Qualifying for these property tax benefits is an involved process. First, you should contact your jurisdiction to determine if you qualify. Then, you must fill out all the paperwork and return it on time. Though it requires a little legwork, it could save you a large sum, if done correctly.
- Partner with property tax experts. Saving on personal property taxes requires skill, experience and time. Many companies don’t have the time to spare or the in-house real estate experience to dedicate to the process. That’s why the best way to save is outsourcing your tax management to expert property tax advisors.
Partnering with experts gives you access to their expertise, takes the responsibility off your shoulders and ensures that property taxes are managed properly, without error. Return focus to your daily business operations and let property tax advisors find ways for you to save.
With time and effort, you could cut your personal property taxes. And with the right expert advisor, you could access even greater savings. Now that you know the steps to take, you’re able to ease your tax burden proactively through personal property tax management.
Explore more benefits of partnering with property tax advisors by scheduling a free consultation.