Avoiding Audits and Common Property Tax Mistakes

Owning commercial property means shouldering a multitude of responsibilities, one of which is paying regular property taxes. While this may seem like a straightforward task, many business owners find themselves in a whirlwind of tax audits and penalties due to common mistakes. 

Common Property Tax Mistakes

To help you navigate this complex landscape and avoid unnecessary headaches, our property tax consultants have compiled a list of these mistakes along with our valuable tips on sidestepping them.

Failure to Timely Pay Property Taxes

One of the most prevalent mistakes is simply failing to make timely property tax payments. Missing the February 1st deadline will result in costly penalties and interest charges. 

To avoid this pitfall, set up automatic payments through your financial institution. This way, you ensure your property taxes get paid on time without having to worry about manual payments or setting up a payment plan that racks up interest.

Incorrectly Reporting Property Value

Another common mistake is reporting inaccurate value for your commercial property. 

Underestimating the value might result in paying less in property taxes initially, but it leads to tax audits and additional taxes down the line. On the other hand, overestimating the value means an unnecessary financial burden.

The key is to accurately assess the value of your property and report it accordingly. Seeking professional assistance from appraisers or tax consultants can be immensely helpful in determining the correct value.

Failing to Take Advantage of Exemptions and Incentives

Many commercial property owners are unaware of the various exemptions and incentives available to them, which can significantly reduce your property tax burden. 

For instance, certain areas or regions offer tax incentives for any businesses that contribute to local development or use sustainable practices. 

Also, remember that you can always appeal your property tax assessment annually to ensure you aren’t overpaying because of a tax assessor’s mistakes.

Research and stay updated on the exemptions and incentives specific to your region to ensure you are taking advantage of every opportunity to save money.

Ignoring Property Tax Assessments

Every year, tax assessors evaluate your commercial property to determine the amount of tax. It’s crucial to review these assessments carefully and promptly raise any discrepancies or concerns. Keep in mind that you have a limited window to dispute any assessment. This date is usually May 15 or 30 days after you’ve received your assessment

Staying Current on Your Property Taxes

In addition to avoiding common mistakes, staying current on your property taxes is essential to maintaining a healthy financial standing. Here are a few tips to help you accomplish just that:

Set Up Automatic Payments

Automating your property tax payments ensures they’re made on time, eliminating late fees and penalties. Most financial institutions offer this service, so you’ll be able to relax knowing your obligations are being met.

Apply for Payment Plans

If you are facing financial challenges that make it difficult to pay your property taxes in one lump sum, consider reaching out to your local tax office to inquire about payment plans. Many jurisdictions offer installment options to help ease the burden and prevent financial strain.

You can even start to pay property taxes early after receiving your assessment. Paying early can help you avoid the threat of missing the next property tax deadline.

Split Your Direct Deposit

If you receive rental income from your commercial property, consider splitting the direct deposit so a portion of the funds goes directly to paying property taxes. This is a proactive approach to make sure your tax payments are accounted for and made without delay.

Avoid Tax Audits & Property Tax Mistakes From Hegwood Group

To ensure you are on the right track and receive professional guidance tailored to your specific circumstances, consider reaching out to Hegwood Group. We’re a leading tax consulting firm specializing in property tax audits and property tax consulting.

Contact Hegwood Group today to learn how we can help you navigate the complexities of commercial property taxes and maximize your savings. Don’t let mistakes cost you money -– take proactive steps toward effective tax management!

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