Property Taxes and when to pay them
You could just calculate when to pay your property taxes so it works out to be beneficial to you. There are people who pay their taxes for the ongoing year and then claim it when they pay their income tax for the year. So if your property tax bill comes in at the end of December which is when it usually does you could pay it at once and claim it on your income tax. If however you pay it in January then it goes into the next years claims.
How do you decide when to pay? Well youll just have to do a bit of figuring out. First youll have to take a look at which year you might have a higher income. Say you believe that in 2009 you will probably fall into a higher tax bracket. Then it makes sense not to pay your 2008 property tax in December but to wait till January so you get the benefit in your income tax computation. This would also apply if you had other deductions in that particular year.
However what you also need to keep an eye on is by what date the taxes have to be paid. If you wait thinking you will get some benefits by taking it into the income tax computation of the following year you also have to be very particular about the last date of payment. It would be a shame if you missed that and had to pay a penalty while you were looking to save money. You could take care of this problem by having an escrow either with your bank or with the mortgage lender.
Do remember to make sure you pick up a receipt when you pay your property taxes as this is absolutely a must when you need to show proof of payment and for your tax records. This also is a good thing to do to show the community if ever theres a doubt about the tax being paid.
Low income households can apply for homestead credits but this too will need copies of the tax bill because the state agency will require it. With a homestead credit if theres one person claiming it and there are two who are paying the tax bill the one paying does not have to meet the total income requirements. This falls under different categories and it has different guidelines that are followed. In fact the homestead form states that you can request for a homestead credit even in the year that you didnt pay the tax.
This however varies from state to state so you might do well to scrutinize the fine print on the homestead form. In some they dont even ask for proof of payment while some might state that the property taxes have to be paid.