We have spent a month trying to study The Tax Cuts and Jobs Act, reading analyses of the new tax laws, and talking to accountants, bankers and business owners about what the laws really mean. The most important thing that I have learned is that there are dozens of provisions that may be important to you. Some of these changes overlap – you lose a deduction for one item, but gain on your standardized deduction. Your top five things to know are going to be different from someone else’s top five, depending on their income, occupation, marital status and other factors. It is nearly impossible to write a top five or even a top ten list. The advice that I am giving to everyone I know is to pay attention to all of their finances, and ask lots of questions. Continue Reading The Top Five Things to Know About the New Tax Laws
We have written a lot of articles about the countywide property tax reassessment covering the basics of residential and commercial assessment appeals and what the new assessed values will mean to property owners. Now that most of the appeals have been processed, the county and each school district and municipality knows the total assessed value of property. They will all set their tax millage rates before the end of the year. All of this coming together will allow you to calculate your total property tax for 2018.
I had the opportunity to work with a few commercial property owners who decided to appeal their assessments. In these cases, we were able to get the total assessed value of the properties cut almost in half. This is going to save these particular landowners around $20,000 per year in property taxes. Every case is different, and I cannot guarantee that anyone would be successful in a property tax appeal. There were, however, major similarities in the properties that received big adjustments in their assessed value. These were:
- There was something unusual about the property that the county did not take into consideration; and
- The property owners had a good appraisal report to support their appeal.
With both of these things present, a commercial property owner has a good chance at getting their assessment reduced.
So what happens if you decided not to pursue a property tax appeal this summer? You are able to appeal your assessment every year. There is a short window of time between when taxes are sent out and the tax appeal deadline of August 1. This does not mean you have to wait until next summer to think about a tax assessment appeal. If you believe that the assessment of your property is incorrect, we can help to evaluate and pursue an appeal.
Aaron Marines is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from Widener University and practices in a variety of areas including Commercial and Residential Real Estate, Land Use, Land Planning and Zoning matters.
The Pennsylvania Supreme Court and General Assembly have created new rules on the amount of net loss carryover (NLC) a corporation can deduct. This is an interesting instance where the Pennsylvania General Assembly has drafted a law trying to predict the Pennsylvania Supreme Court’s decision in the Nextel Communications case. The General Assembly correctly predicted the outcome of the case, and so the new NLC provisions will become part of the new law.
The question is how much of a corporation’s loss may be carried over from prior years as a deduction against taxable income. At the time of the case, the Pennsylvania Revenue Code provided that a corporation could carry over losses as deductions equal to the greater of 12.5% of the corporation’s taxable income or $3 million (now those limits are $5 million or 30% of net income). This produced a result where corporations with less than $3 million in net income could deduct all of their losses up to that $3 million cap. Corporations with net income over $3 million could only deduct 12.5% of their net operating loss. The effect is that many corporations with income under $3 million paid no corporate taxes, while bigger corporations paid quite a bit. The Supreme Court’s decision stated that 98.8% of Pennsylvania corporations did not pay Pennsylvania corporate income tax. The Court decided that this was unconstitutional, as a violation of the Uniformity Clause that requires all taxes on the same class of subjects to be uniform. Continue Reading New Pending Rules for Corporate Net Loss Carryover Deductions in Pennsylvania
Lancaster Online recently discussed the property tax rates for the 2018-19 tax year for all Lancaster County school districts. Since your school tax is usually much larger than the municipal and county tax, the increase in the school tax rate is going to account for the majority of the increase in your property taxes. With this information, you can start to determine how your property tax reassessment will affect you.
If you live in the Hempfield School District, for example, the 2018-19 school tax millage will be 20.33. Even if the municipal and county taxes remain the same, a change in the assessed value of your property will mean an increase in your property taxes. For example, if the value of your property in the Hempfield School District was increased by $100,000.00, your taxes will increase at least $2,033.00 per year. Because most school districts increase their tax rates every year (unless you live in the Manheim Central School District, anyway), the effect that your reassessment will have on taxes will get greater every year.
Aaron Marines is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from Widener University and practices in a variety of areas including Commercial Real Estate, Land Use, Land Planning and Zoning matters.
I continue to talk to friends and neighbors and clients who are confused, concerned, annoyed or worried about the reassessment and what it means for their future tax bills. I’ve heard a lot of people say that the assessors are off their rockers if they think their home’s value has increased as much as the reassessments show. It’s obvious the property reassessments are still a hot topic and seem to be on every homeowner’s mind. I anticipate I will continue to be involved in assessment discussion even after June 1 rolls around and the final notices land in our mailboxes.
If you’ve read my previous blogs, you already know how the reassessments work and have heard my tips to help you decide if an appeal may be your best option. Hopefully, you’ve taken my advice and started to do some research of your own.
If you think you found something that will help you show that your assessment is off, start preparing for the appeal process now. If any of the major facts in your assessment are incorrect, you may have a quick and easy challenge. Let’s face it, if your square footage has all of a sudden doubled, it’s an easy appeal. But most other situations will require some more leg work on your end, and likely a lot more time to prepare. Continue Reading More About the Lancaster County Reassessment – First Step
We have written a couple of posts about the Lancaster County-wide Property Tax Reassessment. In this post, we want to focus specifically on commercial and industrial properties. This includes any sort of income producing properties, including apartments and other rental properties.
As we explained before, the aim of the 2018 Reassessment is to make the assessed value of property equal to the actual fair market value of that property. That is relatively easy to do with residential property – the County can see what properties of a similar size and location have sold for, and compare that to your residential property. But for commercial property, that is much more difficult. Your commercial property is different from most other properties. Continue Reading Lancaster County Reassessment – Commercial and Industrial Property Assessment Appeals
By now, all property owners have had some time to stew over the preliminary reassessments they have received. You’ve read our recent post on the Lancaster County property reassessment, searched Google for more information and discussed it with friends and neighbors. The good news is, you don’t have to do anything yet. That doesn’t mean, however, that it’s not time for you to start considering your options and preparing for the inevitable.
Final assessments will be mailed to all property owners on June 1, 2017. You have 40 days from the date of final notice to file your appeal if you don’t agree with your property’s assessed value or the value becomes final. As is the case with everything else in life, that time will fly by. And because the appeal process may in some cases require an appraisal of your property, your decision to begin the process should be made sooner rather than later. Continue Reading To Appeal, or not to Appeal – That is the question after you receive your property reassessment.
If you own property in Lancaster County, you probably have heard a lot about the County-wide property reassessment. You should have received your Preliminary Assessment Notice in the mail. If you suffered from a bit of shell shock after opening the Notice, take a breath, there are things you can do if you feel the value attributed to your home is incorrect. Continue Reading So I Received My Preliminary Property Assessment Notice. Now What?
Ask yourself this question, and answer honestly: how do I feel about my business recordkeeping?
Last month I attended a presentation hosted by a friend and coworker, Dave the Tax Guy of ITP Taxes. The topic: Recordkeeping. I know, I know, sounds like a topic as enthralling as watching paint dry. But I can assure you, Dave quickly had the undivided attention of everyone in the room, as he told a harrowing story about the process of working through an audit by the IRS. Continue Reading Improving Business Recordkeeping
As income tax season is quickly ramping up, I am commonly asked by clients which parent can claim the children as dependents when they are separated from the other parent. And like any good lawyer, I often say it depends.
So what exactly does it depend on? According to the Internal Revenue Service, in order to claim a child as a dependent he or she must be a qualifying child. Assuming your children are qualifying children, only one exemption can be claimed per qualifying child. The IRS has determined that the “custodial parent” gets the to claim the exemption. The IRS has its own definition of “custodial parent.” According to their regulations, a custodial parent is the parent with whom the child lived for the greater number of overnights in the calendar year. Continue Reading Tax season – Who Gets to Claim the Kids?