Understanding Tax Filing Requirements for Businesses and Rental Properties in Washington, D.C.

If you own a business in Washington, D.C., or have a rental property in the city, it’s crucial to be aware of the specific tax filing requirements that may apply to you. Owning a rental property in D.C. is considered a business or trade activity, making it subject to certain filing obligations. In this article, we’ll explore the two most common tax returns that often go overlooked by taxpayers.

1. D-30 Tax Return

The D-30 tax return is a crucial requirement for individuals who earn rental income from properties located in Washington, D.C., and whose annual rental income exceeds $12,000. Here’s what you need to know about the D-30:

• Who Needs to File: If you have a rental property in D.C. with a gross income exceeding $12,000, you are obligated to file the D-30 form annually and pay the Unincorporated Business Tax (UBT).

• Additional Consideration: If you own personal properties and claim depreciation for your rental property, you may also need to file the FP-31 form (discussed next).

2. FP-31 Tax Return

The FP-31 tax return is essential for individuals who use property for business purposes in D.C. This includes rental property owners, freelancers, contractors, and 1099-NEC employees. Let’s break down the FP-31 requirements:

• Why File FP-31: The District of Columbia’s tax regulations state that they “levy a tax against individuals on the tangible personal property owned or held in trust in that person’s trade or business in the District.” While this language might seem confusing, here are some common examples that necessitate filing an FP-31 annual report:

  • Owning a rental property furnished with furniture and equipment.
  • Operating a restaurant with kitchen equipment.
  • Maintaining an office with valuable furnishings.
  • Using large servers, computers, or other equipment.
  • Possessing lawn maintenance equipment for a landscaping business.

• Key Points to Note:

  • You can file Personal Property Tax Form FP-31 online by signing up for a MyTax.DC.gov account.
  • The deadline for filing and paying your return via MyTaxDC.gov is July 31 every year.
  • Even if your personal property’s value is $225,000 or less, you must still file the Personal Property Tax return.

We understand that navigating these tax requirements can be complex, and that’s why we’re here to assist you. If you have any questions or need help with filing the FP-31 or D-30 forms, please don’t hesitate to contact us using the contact box below. We’re here to support you in ensuring compliance with Washington, D.C.’s tax regulations.