Property Taxes vs. Income Taxes: Which Do I Pay?
Wednesday, April 27, 2016
For those stuck with bigger tax bills this year which ones do you pay first?
Many Long Islanders are going to find both their property tax bills and income tax bills higher this year. That is going to put many in a bind who don’t have the extra surplus cash to settle all accounts immediately. So what do you do?
What are the consequences of not paying these different types of taxes? What help may be available if you can’t keep up?
Failing to pay federal income taxes can lead to many problems. It can be stressful. Once the IRS is aware of your delinquent debt they’ll begin assessing financial penalties and interest. At some point, which could be several years down the road they are likely to make collection attempts. This could include issuing a levy and garnishing wages, bank accounts, and even other assets. Jail is always a possibility for tax cheats.
The penalties for failing to pay your Long Island property tax are quite similar. Once they are past due tax liens are sold off to the highest bidder. These auctions will determine how much interest and fines will be accrued until you settle your bill. However, after just twenty four months your home could be foreclosed on for non-payment.
While the IRS also has the ability to place a lien against real estate, it is normally far more likely that individuals may lose their homes due to late property taxes first.
The other big difference here is the help that is available. Tax payers can automatically receive an extension to file their federal income taxes online. That is normally an automatic six month extension. The IRS has also been declaring that it is making it easier and easier to work with on past due accounts. This may include a sizable discount for settling the taxes in one lump sum, or setting up an ongoing payment arrangement. However, it is important to note that they are not very organized, nor have to grant any leeway.
Property tax authorities, or tax lien holders may sometimes work out payment plans too. However, if your home has equity, and they can take ownership just for the amount owed on your property tax bill, they may be even more highly motivated to seize your property.
What many don’t realize is that a large percentage of Long Island tax bills are incorrectly overinflated each year. By challenging these bills and assessments homeowners may be able to slash what they owe. Some may even be due a refund. This is one item which should be on the top of everyone’s to-do list right now. Those savings can help you stay on time with property taxes, and may even give you the extra cash to pay your income tax bill too. Talk to the specialists at Property Tax Adjusters, Ltd. to find out how much you might save…