Should You Pay Your Commercial Property Taxes Early?

By Senior Property Tax Consultant, Rodney Hegwood

Local taxing authorities send their property tax bills months in advance because most businesses need some time to gather the money to pay them.

Like many other business owners, you probably put off paying the bill until close to the due date, but early payment could be the better move. In some cases, businesses benefit by paying their Dallas commercial property tax by Thanksgiving or at least weeks before the Feb. 1st due date.

Start the New Year Without a Big Bill Hanging Over Your Head

January is when you take stock of the prior year and plan for the upcoming year. When you already have your tax bill out of the way, you can rest easier.

With that big financial obligation off the table, you can focus on making money instead of stressing over writing a big check. Your budget won’t take a big hit right when you might need to make a strategic investment or buy inventory for spring.

Avoid Paying Penalties

The first quarter of the year is pretty sleepy for many business sectors. This means that revenue slows down. If things go badly for you for a couple of months, you might fail to pay your bill on time because you have immediate expenses, like payroll, debts, or insurance.

Of course, missing the payment deadline just makes things worse. Penalties begin to accrue immediately and drive your bill up higher. Once you do manage to pay it, you’re just that much closer to the next tax bill due date and still behind financially.

If you pay Dallas commercial property tax before the end of the year when revenue remains decent for your business, you avoid the risk of not having enough money on Feb. 1st. Additionally, expensive surprises that spoil your plans are always possible even if you anticipate good revenue at the start of the year.

Prevent Business Foreclosure

The terrible reality of property ownership in Texas is that foreclosure may start if your property taxes are past due.

You will still have to pay interest and penalties until your property taxes are paid even if a lien or foreclosure isn’t placed on your home right away.

Paying your bills on time or early allows you to enter the new year as a company owner stress-free knowing that your property won’t suffer the harshest effects.

More Time for a Property Tax Appeal

If you received your property tax assessment though it may be incorrect but didn’t start the appeals process, you’re only leaving money on the table.

Your October bill should be the final alarm that lets you start prepping for further tax savings in the new year through a property tax appeal.

You could still schedule an appointment with a property tax consultant to find out if you could be qualified for a successful contest during the upcoming tax season even though you might have missed the deadline to submit an application for a property tax appeal (May 15 or 30 days after you received your assessment).

A property tax expert can help you through the process and get you closer to ensuring that your future property tax payments are as accurate and low as possible, regardless of whether local valuers overpriced your property or you neglected to file the appropriate exemptions.

Increase Your Current Year’s Tax Deduction

Paying your Dallas commercial property tax after the New Year means that you can’t deduct that expense from your upcoming tax filing. It will only be deductible in the year that it is paid.

However, if you pay it before the end of this year, it could become a deductible expense for this year. You must have received your bill to exercise this option because you need that documentation in the tax filing year.

The Dallas property tax consultants at the Hegwood Group can help you analyze the potential benefits of this move. You should consider the bigger deduction this year depending on your revenue projections for next year. You should keep in mind that if you choose to pay your commercial property tax early for the sake of a deduction this year, you can’t use that same expense as a deduction next year.

Take Advantage of Early Tax Payment Discounts

Some districts reward taxpayers who pay their bills early. State law allows agencies to offer small discounts to early payers. A prompt payment in October right after the bill arrives in the mail could be worth 3% off your total.

Subsequent early payments in November or December could receive 2% and 1% discounts, respectively. If you have a heavy tax burden, then every percentage point matters.

Your taxing authority may not make these discount opportunities obvious. Our Dallas property tax consultants could look into whether your district has an early payment discount.

Spread Out Cost With a Payment Plan

Dividing your bill into two, smaller installments could ease demands on your revenue. If your district allows for split payments, you could get until June 30th to pay off the balance if you can pay half by Nov. 30th.

Find Your Best Property Tax Strategy With the Hegwood Group

With Dallas commercial property tax bills increasing yearly, you need to develop a strategy for keeping them paid on time. As you can see, waiting for the due date presents risks and denies you the opportunity to discover discounts or payment plan options.

Our Dallas property tax consultants can research the best approach to managing these bills. We’ve already taken deep dives into the rules at local taxation districts. Let us enlighten you about payment strategies. Contact us today for your free consultation.

For more information, check out these helpful resources:

Dallas, TX on MapProperty tax collection