The old adage of “a dollar saved is a dollar earned” applies to lowering property taxes on commercial property. It is never a good business practice to pay more than is needed on taxes. Knowing the options and following some easy to follow steps helps property owners find some relief from those daunting taxes.
How Much is Too Much
Scheduling time annually to review the assessment helps ensure an accurate tax amount. Everyone who owns commercial property needs to know how much they pay and why. Most local governments require commercial owners to fill out forms to help determine the tax amount on the property. This information includes income obtained from the property and expenses incurred because commercial tax rates are calculated differently than regular property taxes. Calculating the amount well ahead of time can be done by using some basic mathematical formulas. Understanding how the system works helps people know how much they should be paying. Always keep at least seven years of assessments on file to keep track of any changes, which helps people understand the market and any fluctuations on their taxes.
Review Payment Options
There are several options available for payment of commercial property taxes. Choosing the one that coincides with the financial situation of the business is advised. If the business has a flux of money all at once during a certain time of the year, than paying it in full would make sense. Check with the city and state tax commissions to see if there is a discount for paying in full. If that is not the case, paying in two installments is an option. An installment plan is often more palatable than one lump sum but the final decision of how to pay should coincide with when the money becomes available.
Understanding the Local Market
Stay in tune to the current market values in the vicinity of the commercial property. Prices that go up or down can directly affect the amount that is taxed. Do not let the assessor make a random decision without knowing how prices are changing in and around the area. This also helps when doing a self-evaluation beforehand. Anticipating a change helps owners evaluate before the new tax year by simply looking at properties that have sold and comparing them side by side. This information can be used when speaking directly with a tax assessor. Tax information on properties is generally public knowledge. Once a similar commercial property has been located, the taxes should be somewhat comparable and is a good indicator of what the taxes should be. There may be some variances depending on the information that the assessor has on file for the property.
This seems so simple, but it can be difficult to keep records organized and easy to access. Record keepers need to know the difference between taxable and nontaxable income. Taxable income is the amount that is disclosed unless it is exempt, and nontaxable income has to be reported separately. Real estate and personal property is also treated differently by state and local governments. Keeping all records pertaining to the property and income received is a vital part of the tax process.
Taxes can be confusing and the laws can be difficult to navigate without help. Assessment Technologies is a professional property tax company that is dedicated to helping commercial property owners save money on their taxes through experienced property tax appeals. Assessment Technologies’ experience in the industry has been an asset to people on both a professional and personal level for many years.