Ancillary Tax Reporting
Any business must file multiple tax forms, not just the annual state and federal income tax returns, in addition to their owners’ personal state and federal income tax returns. These include sales tax returns, personal business property tax returns (Form 571-L), annual tip reporting returns (Form 8027), and city business licenses, just to name a few. We can also teach your staff to prepare these forms for themselves.
Sales Tax Returns:
With some exceptions, tax is collected on the sale of every piece of tangible personal property by the seller from the buyer if that buyer is the ultimate “user” of that property. If the user did not purchase a subject item from a seller who is required to collect the tax, the user is then liable for use tax on the item. In California, tax rates vary from county to county and from city to city. At KROST, we have the skill to help you report your use tax purchases and sales accurately and confirm the amount due to the Board of Equalization in an efficient and timely manner.
Personal Business Property Returns (Form 571-L):
Counties and local jurisdictions assess taxes on tangible personal property used for business. Although the tax rate is set by law, the basis of the tax is the “full value” of the property as calculated by the county using the depreciated cost of that property. To make this calculation, counties require businesses to file annual returns specifying the cost and year acquired for all their business personal property across a broad variety of categories. At KROST, we can prepare this form based on information you provide and records we maintain for you, including your trial balance and depreciation schedules.
Annual Tip Reporting Return (Form 8027):
Every restaurant that has customarily tipped employees is required to report annually their total sales, their charged sales, their charged tips, the number of tipped employees, and the amount of tips reported by those employees for inclusion in the restaurant’s payroll calculations. At KROST, we have the expertise to help gather the information needed and distill it into the amounts reported on the deceptively simple-looking Form 8027.
City Business Tax:
Many cities, such as Los Angeles and Santa Monica, charge businesses a license renewal fee based on their annual sales. At KROST, we can prepare and even file this form for you as well as maintain support showing that the form was correctly completed. We can also help you work with the city to settle disputes regarding this tax, potentially saving you up to thousands of dollars in taxes, interest, and penalties.