If you’re here, you might have come across the term personal property tax and wondered if you’re liable.
Personal property refers to anything you own besides land and vehicles. So, it’s those you can move or hold. Your city or state rules dictate if you have to pay taxes for them.
And so, it’s helpful to know the basics to avoid pricey fees and tolls. Check out our guide to learn the necessary points of personal property and its tax.
Personal Property Tax Defined
Generally, personal property refers to movable belongings, like furniture and appliances. It’s anything not attached to real property, such as homes and land.
Personal property tax is a payment you make for those possessions. How it works may vary depending on your location, including what falls under it and what gets taxed.
In some states, a threshold allows exemption based on the property’s worth. If you’re having trouble figuring it out, consider consulting tax professionals.
Am I Subject to Pay Personal Property Tax?
Now, how do you know if you should pay personal property tax? The quickest way to find out is by checking with your local government.
Most of the time, it applies to offices and business owners with several assets. Usually, individuals who own simple household goods are exempt from personal property taxes.
If you fail to pay these taxes, you could face a penalty from the IRS and pay expensive fees. On the bright side, taxpayers can claim a deduction on personal property taxes. It’s deductible from your federal income tax bill based on the property’s value.
What Properties are Taxable?
Like other aspects of personal property tax, the possessions under it vary. Generally, these include things like equipment, machinery, computers, and supplies. Personal belongings often don’t count.
Note that some of these should reach a specific amount before being taxable. That’s why the tax often applies to larger spaces like an office since they have more of those appliances.
Paying for Personal Property Tax
Personal property tax is annually due and assessed at the start of January. Then, they start mailing the bills to everyone who owes taxes.
For some types of personal property, you need to register them at your local tax office. You can fill up the form online or in person, whichever’s available.
The rules that dictate whether you should file and pay taxes differ by location. Even if you own a business, if your equipment is worth less than the threshold value, you don’t need to file for tax.
The payment process is the same as paying other taxes. It’s best to calculate the cost beforehand or get in touch with an expert to guide you.
Contact a Professional to Learn More about Personal Property Tax
Personal property tax is a fee people or organizations pay for movable assets. The amount of personal property tax to be paid will vary from state to state and depending on the type of asset.
Call a professional today to learn more and be up to date on your local tax requirements! Did you find this article helpful? Check out our blog for more legal tips.