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Paying Your Property Taxes

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					Paying Your Property Taxes

Many people pay there property taxes in the tax year and claim there
taxes on their income taxes for that year. For example, the year 2007,
you receive your property tax bill in December and pay the tax
immediately. You can then claim the property taxes on your income tax. If
your wait until January of 2008, you will have to claim the property
taxes for 2008. There are different reasons for paying your taxes right
away and there are reasons for waiting until the following year. Deciding
when to pay your taxes may be determine by thinking about your current
tax liability.

If you are in a higher tax bracket in 2008 than you are in 2007, you may
want to wait and pay your property taxes in January of 2008. This will
help lower your total tax liability in 2008. If you are in a higher tax
bracket for 2007 and expect to drop into a lower tax bracket in 2008, you
may wish to pay your property taxes in December of 2007 so you can claim
it on your income taxes to reduce the tax liability for 2007. Other
reasons to wait or pay your taxes may also include other deductions you
may or may not have in a given year.

Everyone has different circumstances for needing to pay property taxes in
a given year. If you usually pay your property taxes with an income tax
return, you need to make sure that you receive the money before the
deadline established by your community. If you fail to pay the taxes on
time, you will face a penalty and some interest charges. This is so even
if you miss it by one or two days. It is always wise to have an escrow
account either established by your mortgage lender or one you have
yourself in the bank.

When you pay your property taxes, you should make sure to receive a
receipt. This is needed for your tax records as well as showing proof of
payment if the community would ever say you still owe money on your
taxes. After paying your property tax bill, you can then claim it on that
year's tax return.

People who are low income and can apply for a homestead credit will need
a copy of the tax bill to send to the state agency that handles the
homestead credit. If two people are on the tax bill and only one is
claiming the homestead credit, that person does need to meet the
requirements for total income. There are different guidelines to follow
for this type of filing. You can submit a homestead credit request even
if you did not pay the property tax for the tax year you are claiming.
This stated on the homestead form itself.

Now, this may be different for every state, therefore you need to read
your homestead form very closely. Some states may require that the
property tax is paid and some may not require proof of payment.

				
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