Fixed assets are a long term tangible piece of property that is expected to last more than one year. Examples include but are not limited to the following:
- Property (building and land)
- Furniture & fixtures
- Machinery and equipment
- Computer equipment
- Vehicles
These are the main categories but there are plenty more.
It is important to classify them correctly when preparing you accounting records. These items would show up on a company's Balance Sheet verses the Profit and Loss statement. If you are not using a software, it is helpful to your accountant if you keep a list of items that you purchase throughout the year including date of purchase, description of asset, total asset price. This way, if they were recorded incorrectly, they can be easily adjusted.
These fixed assets are reported on the tax return (due March or April 15th depending on the entity type) as well as the business property tax listing (due January 31 for most NC counties).
Tax planning strategies can come in to play with the purchase of fixed assets. Be sure to check with your CPA to see what is best for you.