Economics Finance

If you are like most people you are trying to do whatever you can to lower your expenses. As gas prices and movies go up in price along with everything else we are always trying to cut at least one of our bills and save some money. Well, I have a way for you to possibly save a couple of hundred bucks a year if not more and it doesn’t involve cutting out your morning coffee or anything drastic like cutting your heat off in the winter.

No, you can reduce one of your largest expenses by simply signing your name if you are a homeowner. What I am talking about is your property taxes. Each year you must pay your property taxes whether it is escrowed thru your mortgage company or you pay it out of pocket yourself. The amount of property taxes you must pay each year is set by the county’s tax assessor’s office. They decide how much you will pay based on what your neighbors are paying and what amenities your home has compared to theirs.

For example, if you have a 1200 square foot house and your neighbor’s house is 1400 square feet then in theory, your neighbor’s taxes should be higher. But if your in cook county this isn’t always the case. So normally what happens is if you believe that you have a higher than normal tax bill you are able to challenge the assessment that is used to figure out your tax bill. If the board of review finds that you are paying more than your fair share of taxes then they will lower your assessment and thereby lower your tax bill. If they find out that your taxes are not lower than everyone else they will not reassess your property and your taxes will not be changed. Continue reading ‘How to Lower Your Property Taxes Quickly and Easily’ »

It is often very dangerous to make blanket statements that apply to large geographical areas. The 2007-2009 period, however, can be said to have been a brutal one for the real estate market in general. This might create a property tax readjustment for those who are clever.

Property taxes are used to fund most local financial needs. This includes city or county governments, the police, firemen and so on. Most of the costs are noble, but there is little denying that rates have become incredibly burdensome to homeowners in most of the country. As rates rise, you and your neighbors undoubtedly grumble more and more about paying them.

The last few years has seen a real estate market that can only be described as being in free fall. While some pockets of the country remained stable or even grew a bit, most areas saw home values plummet like a rock dropped from roof. It was quick. It was brutal. A lot of people got hurt. As these prices have spiraled downward, the issue of property taxes should have popped into your head. Simply put, did you home drop far enough in value to result in lower ones if an assessment was done? If so, opportunity is knocking. Continue reading ‘A Unique Property Tax Adjustment Idea’ »

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’ »

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?’ »

If you have a property that you have been given by some elder member of the family is his last will than you must consider the issues you may face regarding property taxes. You will surely need to know weather you made money or lost it if you selling your property. Tax issues related with properties can be a little complex at times. IRS can be really curious in tax cases when it comes to properties because for them property is not just real estate it also includes, stocks, bonds, cars, boats and computers. Tax basis is an IRS term for cost. Basis is the term you must not forget because it is the actual thing you are being paid for.

You must also consider a fact that determining the tax basis for properties that you inherited or received as a gift is different. You may never know the cost of inheritance, the tax basis for determining the taxable gain or loss of the property you inherited is the fair market value of that property on the date of the title holder’s death. In other case the property which is received as a gift, the tax basis is either the donor’s cost of the fair market value on the date you received the gift. So first get to know that what your tax basis will be in either a gift or an inheritance case. For that the best time is when you receive the gift or your property through inheritance. The reason is that years after the people who have the tax information of that property may move or even died. If you know the basis of the property that you have receive either through a gift or inheritance, because you have access to either gift tax return (Form 709), the Estate Tax Return (Form 706), or because your uncle Don told you upfront what your basis is in property, it’s the best news you can hear on a bright sunny day on your new property. Continue reading ‘Handle the Properties You Recieve by Inheritance’ »