5 FAQs About Form 571-1
July 9, 2021
If you own a business in California, there are numerous tasks to complete during tax time. One of those tasks is to fill out Form 571-1, or a Business Property Statement. Learn what your Encino tax consultants want you to know about this form to help you tax prep efforts.
What is the Form, Exactly?
Form 571L Business Property Statement (BPS) is a property tax form used to declare business assets. All properties you claimed, controlled, possessed, or managed as of the year’s lien date must be accounted for; the lien day is January 1 of each year. This date is the day when your business property becomes “assessable” in the eyes of the IRS.
Why Do I Need to Use it?
Yearly filing is required according to 441(d) of the California Revenue and Taxation Code. Statements provide information about current business assets to determine its value for the tax year. Any business that owns property worth a combined total of $100,000 or more must file to avoid audit issues.
What is Considered Personal Business Property?
The IRS identifies business personal property as computers, fax machines, copiers, and manufacturing, lab, video, printing, shop, and restaurant equipment. Office furniture, leasehold fixtures and structures, and hand tools also count as business property, as does any other equipment, tools, and supplies used to keep the commercial enterprise operational.
Is Some Equipment Tax-Exempt?
Your Los Angeles accountants note there are several types of equipment that do not need to be declared on Form 571-1, including business equipment you sold, rented, or leased. DMV-licensed vehicles do not require declaration either, nor does software such as Microsoft Office.
What Information Do I Need to File?
Filling out Form 571-1 requires gathering your general ledger or balance sheet, California state tax returns, equipment receipts, and income or profit & loss statement. You also need your asset depreciation schedule or fixed asset listing to fill out the form correctly and efficiently.
If you require help with your Business Property Statement or any other tax preparation assistance, contact Wallace & Associates. These accountants in Los Angeles are ready to help you file at any time.
