Property Tax Relief

Once in awhile, the government surprises me. Hard to believe it, but some good news has been received from the powers on high. The IRS, the most reviled institution ever conceived, made a decision! Eureka! After years of prodding, they decided(they are The Deciders) that certain tax assessments on property owners are DEDUCTIBLE ! Once more: certain assessments are now deductible on your 1040 Return. This means several things to homeowners:
1. You must review your returns.
2. You must consult with your preparer
3. An amended return must be filed for Tax Year 2011
4. Depending on which special districts the property is situated, dollar amounts will differ widely.
5. There might not be any change in amount owed
6. There might be significant money returned to you
7. Estimated tax for 2012 can be affected immediately

This decision will mean a significant reduction in money flowing to Sacramento and Washington. They are not happy! Their budget fantasies will now take a big hit. ON the positive side, the money returned/not paid to the gov. will stay in the hands of, you got it, CONSUMERS, You and me, who can spend it where we want to, when we want to without having it pass through the filter(s) of the Franchise Tax Board(Cal. State) or the IRS. The decision was basically an agreement between to tax authorities, the IRS and the Franchise Tax Board of California. All the additional taxing agencies and districts in California collect their revenue from fees and parcel taxes assessed on property owners situated in the district. Most often, these taxes and fees were not deductible. Now they are deductible. Is there a cost involved?
If you use your tax preparation service, yes, but it should be minimal as they have your records(2011 Returns) and can cull out the deduction using the program they use to compile the 1040 Form sent in on April 15. A quick glance noted quite a savings for the Mayor's office.
I would strongly recommend a review of all 2011 tax data and discuss the issue as soon as possible. If you are not a property owner, this ruling/decision should not affect your returns. Although it will affect the bottom line of the landlord if the property is located in California.

This is a case of a no-brainer: review your 1040 Form and Cal 540. You may have a tax refund due from taxes already paid. I hope it makes your 4th of July.

Score 1 for the good guys!