The world revolves around taxes. Whether you buy a pack of gum or file a tax return to the Internal Revenue Service, everyone pays a value to the American government to make improvements that the general public will benefit from. Not all people like to pay taxes, but money generated from taxes is crucial to improving the American way of life. Here are some ways that you can pay your dues in property taxes.
What are Property Taxes?
The property tax is a tax charged to an individual or an organization based on the real value of land, real estate, and other properties subject to taxation. Property taxes are a major source of revenue for communities, because the amount of money charged for tax is based on the value of the property. Different municipalities, counties, and states have different rules and regulations for assaying and determining the value of a certain property.
Property taxes can be divided into three categories:
- Ad valorem. Ad valorem (Latin for “of value”) taxes are assessed and paid based on the appraised value of a property. Appraisers from the government will then survey your property and calculate the taxes due based on the rates prescribed by the tax commission at the state level.
- Special assessments are taxes based on benefits prescribed by the tax commission or the federal government. Special assessments include water, community lighting, and sewerage.
- Personal property. In the United States, some personal properties may be subject to taxation, like vehicles, artworks and sculptures, and furniture. Some assets like inheritances and stocks may be subject to assessment, appraisal, and taxation.
Some groups lobby against property taxes; some may feel burdened by assessments and appraisal, and some point out policies on property taxation that are outdated or regressive. People who push for property taxes, however, believe that the tax is the most reliable way for local governments to generate revenue. Property taxes are measured and calculated as opposed to the appraised value of property, which means that a person’s tax dues to the government are evaluated in a fair and just manner.
Reducing Property Taxes
Not a lot of people like paying taxes. Refusing to pay taxes can get you into trouble and put you in litigation for tax evasion. No matter what you do, you have to pay for your property taxes based on the value of real properties that you own. You can reduce the amount of money you pay in property taxes with these tips:
Live Below Your Means
One way to reduce property taxes is to reduce or minimize the amount of taxable properties that you acquire. While you may be able to afford a certain parcel of land or an automobile, you should also consider how much you have to pay for it in taxes. You should also think about tax appraisals when you’re renovating or improving your home, or if you’re buying high-value decorations like artworks.
Consider Other Properties
High-value real properties may be considered an investment for some people, but it may result to an unnecessary tax burden if you can’t afford to pay taxes due on time. One way to reduce property taxes is to move away from urban centers where the tax rate is typically high. The movement away from city centers is called an “urban sprawl.” Some policy experts say that the movement of people to suburbs may be explained by tax rates levied to people near urban centers. Moving to a suburb does not mean that you’ll pay a lower rate, especially if you buy high-value properties or if the appraisal of your property results to high tax values.
Another way to reduce property taxes is to do your own taxes yourself, with the help of an independent appraising service. While this may cost you, it does reduce the possibilities of getting overtaxed. Here are some reminders:
- Keep up-to-date with market values. Market values fluctuate and change rapidly, especially for real properties. You should do your research on trends and changes in market values for real properties to make sure that you’re paying the right amount in taxes.
- Compare properties. Another way to reduce property taxes is to compare your property taxes with other homeowners with similar properties, or if your tax values are on the same trend with your neighbors. If they do not tally, or if you feel there’s something wrong with the computation, you may want to draft an appeal to the Internal Revenue Service or to the local government.
- Don’t cheat on your taxes. No matter what you do, you should never make the mistake of misrepresenting your tax returns, or cheating on appraisal. Remember that there’s no use running or escaping from Uncle Sam, so don’t even try to do anything that can get you in trouble with the government. (Learn how to be a good citizen)
Taxes are the lifeblood of a nation. With these tips, you can get rid of high property taxes and still pay your dues to help your community and country grow and improve. If you learn from this article, you’ll surely learn more by reading how to file your taxes.
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