Thursday, January 1, 2015

What January 1 means for local taxes

With many local taxes—especially property taxes—everything significant hinges on January 1.  Here are a few things about this key date that homeowners and business owners should consider in order to understand tax liability for the new year.

Property taxpayers
Property assessments for 2015 conducted by DeKalb County will be based on the status of the property as of January 1. For example, new developments and improvements made prior to January 1 will be factored into 2015 assessments by DeKalb, but improvements made after January 1 would not. Properties annexed into Decatur in 2014 will be taxed by Decatur in 2015, but properties annexed in 2015 wouldn’t be taxed in Decatur until 2016.

If the status of your property has changed since last year, you should file a return with the DeKalb County assessors office between now and April 1. If you own or owned a business that closed in 2014 or moved out of Decatur or DeKalb, you should also notify the DeKalb County assessors office to ensure that you do not receive an assessment notice and tax bills from DeKalb and Decatur in 2015. If your business is open for the beginning of 2015 you will receive an assessment and tax bill for 2015 even if your business closes or moves later this year.

Property owners should also note what tax officials mean by “the first-of-the-year owner,” or the “January 1 owner.” DeKalb County records and their website show both the owner as of January 1 and the current owner if ownership changes later in the year. Many times, we are questioned about why a bill or a delinquent notice was sent to the January 1 owner rather than the current owner. Generally speaking, Decatur attempts to notify the current owner of bills that are owed. But there can be delays in reflecting current ownership information, and technically, the January 1 owner may be considered to be responsible for the taxes that year depending on the terms at closing, or at least be responsible for notifying the current owner of any bills that the January 1 owner received for the property.

Lastly, when you file your 2014 federal income taxes, if you will be itemizing deductions including local property taxes paid, you can claim payments actually made during calendar year 2014.  If you're paying your 2014 property taxes late (for example, if you pay your 2nd installment 2014 Decatur tax bill on Jan. 8, 2015), you can't deduct that on your 2014 income taxes.  But please consult a tax professional for further guidance on that.

Homestead exemption applicants
Qualifying for age-based homestead exemptions for your property taxes depends on the age of the homeowner as of January 1. If you turned 62, 65, 70, or 80 prior to today, you may have become eligible for one or more homestead exemptions offered by Decatur. Homestead exemptions can be applied for with the city between now and April 1, but preferably no later than March 16, 2015 to ensure that any new exemptions on your account appear on your 1st installment tax bill which will be mailed out by April 1. You should also check with DeKalb to determine whether you have become eligible for any additional exemptions with their office.

Occupation taxpayers
If your business has more than 10 employees as of today, you will need to file an E-Verify form with our office prior to the next renewal of your business license, because state law references the number of employees as of January 1, not as of the time you are renewing your license.

Also, Decatur’s occupation tax ordinance says that occupation taxes are payable by January 2 of each year but that the taxes are not considered delinquent until January 31, which is why the Revenue Division puts a January 31 deadline on business license renewal invoices.

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