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Worrying About Property Taxes ?
By arlene | January 30, 2008
Someone once said that the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing. This article explains what a lot of that hissing is about and even offers a few suggestions on how to hold onto a few of your financial “feathers.” Taxation is a serious matter and a costly one. It’s essential that you understand the subject very well.
City Taxes
Charles Dudley Warner once said, “The thing generally raised on city land is taxes.” Regardless of the city, the harvest of taxes is always a bumper crop. As noted earlier, governments love to govern, and one of the most common acts of government is to raise taxes. Cities attempt to raise revenue any way they can. Sometimes the creativity of these bureaucrats is amazing—and more often than not, it will affect you and your business.
Tax Terminology
It’s always important in business to understand precisely what each of the common terms related to taxes really means and how it should be used. When it comes to taxation, knowledge is essential. A simple misunderstanding or misuse of a word or phrase could have serious consequences. Here are a few taxation-related terms you’ll run across your real-estate dealings:
A tax credit is a reduction against the income tax payment. Tax credits that may be available to you include rehabilitation tax credits for historic or older buildings and for some low-income housing.
A tax deduction can be used to reduce taxable income. For example, if the taxable income on your property is $100,000, but you can claim $25,000 in deductions, your taxable income would be $75,000.
Tax deductible refers to an expense that can be used to reduce taxable income. Usually, ad valorem taxes and interest are deductible for all types of property. Depreciation, repairs, maintenance, and other necessary expenses are tax deductible for income property.
A tax lien is a debt attached to a property for the owner’s failure to pay taxes, whether they are city or county taxes, estate, income, payroll, sales, or school taxes.
A tax map is an official document detailing the location, dimensions, and other pertinent information regarding a parcel of land subject to property taxes. These are considered public records and are generally found in bound volumes at the local tax office.
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Topics: Land, Property, Sale, School | 5 Comments »
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