Jassen Bowman EA
Jassen Bowman EA

Challenging Property Tax Assessments

Your annual property tax bill is based on your county government’s valuation of your property. Assessed values are often very different from the actual fair market value of your home. If your county assessment is too high, resulting in a property tax bill that is more than it should be, you can contest the property valuation in an attempt to reduce your tax bill.

The fair market value of your property is represented by the price that a typical home buyer would be willing to pay for your house. Arriving at the fair market value of your home without actually selling the house is accomplished by comparing your home to other houses that have sold. A proper comparison requires that the other houses be as similar to your house as possible. The best comparable properties will have nearly the same square footage and number of bedrooms and bathrooms as your house. In addition, they will be in the same neighborhood and will have sold within the last few months. This process is very similar to how appraisers determine the vale of your home.

There are two types of assessed value that local governments use to determine your property tax bill: Market assessed value and tax assessed value. Market assessed value is the government’s estimate of the fair market value of your home. This valuation is often based on the last sale price of the property, adjusted occasionally for appreciation. Since many counties multiply all properties by the same appreciation rate, the assessment may not take into account unique features of your home, location, or the modern realities of your local real estate market. Some localities will further multiply your market assessed value by some other fraction in order to arrive at the tax assessed value, and then apply your local tax rates to this number.

When the assessed value on which your property tax bill is based is higher than the actual fair market value of your your home, you may end up paying too much property tax. Most counties offer informal hearings at which you can challenge the assessed value. To prove your case at this hearing, you should be armed with an appraisal, a Broker Price Opinion from a licensed real estate agent, or your own list of recent comparable sold properties. You may also have the option of appealing the assessment valuation to a review board. In rare cases, you may … Continue reading

Quick Guide to Late Filing, Amended Returns, and Late Payment Penalties

In most years, April 15 is the deadline for the majority of Americans to both file their tax return and pay any taxes that are due on that return. If you don’t file on time, you potentially face one set of penalties. If you don’t pay by this date, there’s another set of penalties that applies.

Here’s the good news for individuals that are unable to pay by the normal due date: The late payment penalty isn’t nearly as stiff as the late filing penalty.

The reason for this is because the IRS is far more interested in knowing how much you owe rather than having you pay it on time. They rely heavily on people filing their tax returns in order to make the proper tax assessment (never let the IRS do your tax return for you). Knowing how much you owe them starts a well defined process, but when the IRS doesn’t know how much you owe, they can get pretty grumpy about it.

Of course, the more you pay with your tax return or extension, the lower your penalty and interest charges are going to be in the long run. This is because all of your penalties and interest are a percentage of the unpaid balance due after April 15th.

The penalty for not filing a tax return is typically 5% per month or part of a month. One day is considered “part of a month”. This penalty caps out at 25% of the unpaid balance. Do note that if you properly file an extension, and pay the balance with the extension, then there is no penalty. The extension form essentially gives the IRS the same bottom line “amount due” number that they are looking for, just without the math showing how you came up with it. With your extension, you must pay at least 90% of the balance due on the final return in order to avoid penalties.

As already mentioned, the penalty for not paying is far less than the penalty for not filing. This amount is one half of one percent per month (or part of a month).

If you are subject to both the non-filing and non-payment penalty in the same month, the combination of the two penalties together is capped at 5%. If you file your return more than 60 days after the April 15th deadline (or after the extension deadline), then the minimum … Continue reading

Webinar Schedule for week of April 13-17, 2020

The past three weeks feels like a blur, it just vaporized. Do you feel the same way?

After the flurry of legislation, procedures, memos, bulletins, and more, this coming week should be a little quieter on the regulatory front. But we all still have a lot of work to do in order to ensure our clients are obtaining the loan funds, stimulus checks, and protection from future IRS enforcement that they need. In that vein, we have a series of support webinars for you this week to help your clients.

PPP & EIDL FAQs. April 13, 10am PDT (1pm EDT). Last week, we presented three webinars on the PPP program, and the week prior three on the EIDL program. This week, Dan and I delve into the most Frequently Asked Questions about these programs. Join us for this 2-hour CPE webinar on Monday. 50% of your registration fee will be donated to the Central Brevard Sharing Center, the food bank near Dan’s office. Click here to register.

Pre-Resolution Case Action You Should Take During IRS Collection Suspension Period. April 14, 10am PDT (1pm EDT). Long name, amazingly awesome CPE! Seriously, this is going to be the most amazing CPE class of the year. We’re going to discuss the current suspension of IRS Collection activity, what that means for your existing clients, and how to take advantage of this gift of time. Time to get your client “fixed”. Time to get them current and compliant. Time to do all the things necessary to get them on the path for success. What are those things? Register here to find out. 1 CE/CPE hour for both EAs and CPAs.

The Top 3 Tax Resolution Marketing Strategies. April 15, 10am PDT / 1pm EDT. Another magical benefit of the Collection suspension period…another gift from the government due to the extension of filing season…one positive aspect of being forced to work from the seclusion of your basement at 2am… The opportunity to finally focus in on your lead generation marketing. Revised and updated with important details for marketing in the current economic crisis, this complimentary webinar (no CPE) will show you how to utilize the “time bonus” you’ve been given to most effectively generate new tax resolution clients. This class, much like a good cheese and wine combination, pairs well with the the Tuesday pre-resolution actions class. Click here to get yo’ marketing … Continue reading