Real Estate Property Tax Mistakes to Avoid

It's easy to make mistakes with real estate taxes. When these mistakes happen, you may find yourself not receiving certain tax refunds and you may even find yourself in trouble with the IRS. Here are some mistakes to avoid and what to do instead. 

Not Filing a Return

If you earn below a certain amount in a particular year, you may not be required to file a tax return. However, you should file a tax return anyway because you might be eligible for a refundable credit. If you are claiming unemployment benefits, you will need to file a tax return. 

Not Being Careful with Deductions

There are many deductions related to your home that can potentially lead to an audit. For example, if you have a home office deduction, you may be reluctant to claim it. The good news is that there are a larger number of Americans working from home and this type of deduction is less likely to provoke an audit. However, you may want to speak with a professional before making any deductions you are not sure about. Even if you are allowed to claim something as a deduction, you must make sure to get the deduction amount right. Do not overestimate the expenses you have encountered that you wish to use as deductions. 

Not Hiring a Property Tax Attorney

One of the biggest mistakes you can make is to not hire a real estate tax attorney when you need one. When you receive a property tax assessment, you will often only have a limited window to file an appeal. Therefore, you'll need to contact an attorney as soon as possible to make sure that the appeal is filed. Even though property values have fallen, property taxes often go up. While property taxes are based on the market value of your home, home market values are uncertain. When there are fewer homes being purchased, you might find it more difficult to receive a fair assessment of the value of your home.

To file your appeal, you must fill out supplemental forms and you must also provide all of the documentation and evidence you need to make your case. If your property was not assessed in a manner that is consistent with your community or if the assessment is significantly off, your appeal might be successful and you may then nor have to pay as much in taxes. Anytime you encounter real estate property tax legal issues, you should consult with a real estate tax attorney.