Economics Finance

We have many obligations to face in life. And, one of these obligations is to pay different taxes like income tax, property tax and many others. Since we have many obligations and not just these taxes, we sometimes take paying taxes for granted. This will cause a very big problem to non-payers.

Not being able to pay your taxes, (property taxes in particular) may lead to the following problems:

You may lose your property or house. Unpaid property tax leading to delinquent property tax may lead to losing your property. However, there are still second chances given. So, if ever you are given more time to pay your delinquent property tax, find a solution for this right away or you may really end up losing your property. You may only be given two years to settle your unpaid taxes. Continue reading ‘Pay Your Property Tax Or Lose Your Property’ »

Owning a rental property may be advantageous in some ways. The income you get from rental real estates can sometimes be a substantial amount, and this could increase your tax liability. However, landlords can reduce their income tax on their profits. This is possible through investments. To know more about rental tax deductions, read on.

There are two types of investors: passive and real estate professional. The losses of real estate professionals are deductible against all types of income, be it passive or non-passive. If the losses are passive, then the landlord is only allowed to deduct up to $25,000 against the rentals’ income. Conversely, losses that exceed up to $25,000 can be carried forward to the following year. Continue reading ‘What You Should Know About Rental Property Tax Deductions’ »

Property taxes have always been abused by local governments. Up and up they go, but homeowners have rarely really fought the rise since home prices were going through the roof. That’s obviously changed significantly in the last few years, but these taxes keep going on up. If that infuriates you, and it should, you should fight to have them lowered.

Ah, the good times. You could buy a home and watch it appreciate 15 to 25 percent a year. The good old days were here in a big way, but it couldn’t last and it didn’t. 2007, 2008 and 2009 all saw a huge correction in real estate as the bubble popped and prices plummeted. Despite the drop in value, property taxes in most places have remained the same or actually gone up! How can this be?

The first thing to understand is it is believed that roughly 60 percent of the home values used to establish property tax rates are overvalued according to the National Taxpayer Union. This shouldn’t be a shocking number. It has been around for years, but homeowners rarely took action with prices going up since they could logically associate increased home values with increased taxes. In fact, only 2 percent of homeowners with artificially high assessed home values ever file an appeal! Continue reading ‘Why You Should Fight Your Property Tax’ »

Many homeowners are experiencing a shock regarding their property taxes. Despite the fact the value of homes in most markets have dropped dramatically in the last two years, their taxes are the same or rising. How can this be? It can’t and you should fight the problem by filing an appeal.

The key to understanding property taxes is to grasp how they are figured. It is done differently in each state, but most methods involve a municipality setting a rate. This rate is then multiplied times the assessed value of your home. The resulting figure represents what you owe, which is also known as a millage. Continue reading ‘The Key Aspect to Fighting High Property Taxes’ »

1031 is a derived name for tax deferred exchange, with its parent name coming from Section 1031 of the Internal Revenue Code. In other words, 1031 tax deferred exchange falls under the Section 1031 of Internal Revenue Code. 1031 is specially established for business tycoons and real estate barons. Established in the 1920’s, almost all tax payers use this as a trustworthy and powerful financial tool for generation and enhancement of wealth, as well as for money in today’s times.

It exclusively enables tax payers to sell their property, investment, income or any other valuable assets in exchange of similar kind of property or asset. It also gets its name from ‘like-kind’ or ‘tax-saving’ tool. Rather than calling it a simple sale, 1031 tax deferred exchange is a transaction where exchange of two assets takes place. It is not a mere buying and selling of property, but it focuses on how the property owner would want to sell his piece of property in exchange of another property, by deferring the ‘capital gains’ taxes to the newly obtained ‘like-kind’ property; thus a result of the property swap.

1031 exchange is flexible enough as far as choice of swap ‘like-kind’ real estate- swap is concerned. An agricultural land can be swapped with real estate property; a real estate property can be swapped with rental property, where as commercial buildings can be swapped for shops. Continue reading ‘Explanation of the Workings of a 1031’ »

Has your property value gone up according to the county, when you know it actually went down in this current economy? You don’t have to take their word for it, you can appeal.

If you’re thinking about appealing a county property appraisal, here are a few tips from a leading Ohio tax appraiser.

Around the triennial homeowners receive a notice of the change in their property values either up or down, this is the time when you want to appeal your real estate tax appraisal.

Please note: Not all counties and states are not the same, so this is just a rough guideline for appealing your county tax appraisal. Check with your local county to learn their specific steps for appeal.

* Your fist step is to contact your local appraisal company. Have them come and do an appraisal of your home. If their appraisal is lower you may have a case.
* Your next step is to contact your county auditor’s office, to request an “informal meeting” which is usually run by an independent appraisal company contracted through the auditor’s office. The meetings are usually held in a public place. There may be several meetings set up for the same time, if others are appealing at the same time. Continue reading ‘Appealing a County Tax Appraisal’ »

The oddest thing is happening to homeowners across the country. The value of their homes has been dropping the last three years, but their property taxes have been going up! If this describes your situation, it is time to fight back.

The first thing to understand about property taxes is “rates are rates”. This simply means that if the agency controlling your property taxes raises the tax rate, there isn’t much you can do about it. Municipalities are facing huge budget shortfalls and rate increases are one of the ways they making up for the shortfall. This doesn’t mean that you can’t fight your property tax bill.

Property taxes are often based on an appraised value of your home. This appraisal is done in a drive by manner. Most municipalities hire independent third parties to do the work. These individuals drive by the home and guestimate the rooms and square footage. As you can imagine, this is the area where you can really attack your tax problem. So, how do you do it? Continue reading ‘Fighting Your Property Tax Increase’ »

Paying property taxes to your city, town, or county is part of a home owner’s responsibilities. Property taxes are computed based on your home’s assessed value. Don’t get confused because the assessed value and appraised value are two different things. To make it simple, the appraised value is simply the market value of a property in today’s market while the assessed value is used by taxing authorities to put a dollar value in the property for taxing purposes.

Most states do offer a property tax reduction for Veterans. Though each state has its own guidelines, most states measure property taxes by mils (one mil means $1 for every $1,000 value of a home). So for example, if you have a house worth $100,000 with a 3.5 mil property tax the owner will have to pay $3.50 for every $1,000 in value or simply $350. However, regardless of how these taxes are computed, a home owner owes this amount to the government. If you have a mortgage, some lenders require monthly property tax payments as part of the mortgage payments. If this is not your case, then your town will ask you to pay property taxes every 3-6 months wherein you have to pay in full on its due date. Check with your local taxing authority to find out more. Continue reading ‘A Veteran’s Guide to Property Taxes’ »

For the first time ever the United States government is providing tax credits for Americans who buy their first home. Many of the program’s provisions can be complex and confusing, especially for those unfamiliar with the process of purchasing a home. In order to take advantage of this system it is important to understand the specifics.

In an effort to jump start the collapsing housing market, this year’s stimulus package included an up to $8,000 tax credit for first time home buyers. However, time is running out on this program as only homes purchased before November 30 will be eligible to be included in the tax credit program. That is unless Congress decides to extend the program. Continue reading ‘Demystifying the Housing Tax Credits For Millions of Potential First-Time Home Buyers’ »

Tax reassessment has been the main topic of discussion more times in the last six months than it has been in the last ten years. There seems to be a misguided assumption that if property values decrease then property taxes will also decrease. Of course, this is based on the fact that when property values increase so will the taxes. Unfortunately, the former is mostly false while the latter is mostly true.

Like everything else, all you have to do is follow the dollar to see why it works this way. I’ll explain.

Every county, city and municipality across the country needs money to pay for basic services such as the police, firemen, schools, payroll…and the list goes on. This money, in large part, is provided for by property taxes.

Let’s assume this year is a tax reassessment year and your county needs ten million dollars to meet its budget demands, up from eight million three years ago. This amount includes the basic services described above along with all current and future projects that have been approved by the board of trustees.

Once the budget amount has been calculated (ten million) the tax assessor will reassess the property values in order to meet the budget amount.

The tax assessor will take into consideration the estimated property value, proposed assessed valuation, state equalizer, exemptions and the current tax rate when establishing property taxes.

The following is an example:

Let’s say your home is worth $100,000 and the county has your assessment level at 10%. Your tax will show a home value of $10,000. This is called a Proposed Assessed Valuation.

The tax assessor takes the Proposed Assessed Valuation and multiplies this by something called a State Equalizer. In this example, the State Equalizer is 2.8439. When you multiply the Proposed Assessed Valuation with the State Equalizer you’ll get the Equalized Assessed Value, or $28,439. Continue reading ‘Tax Reassessment – Does a Declining Market Mean You’ll Pay Less Property Taxes?’ »