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Old 02-05-2012, 01:51 PM
 
28,107 posts, read 63,391,831 times
Reputation: 23222

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There is a new push to increase revenue by making sure home owners are not deducting excluded "Property Tax" charges against Income when filing.

Some cities, like Berkeley CA, the portion not deductible is about $2000 and Oakland is $900.

Mello Roos has never been deductible, yet this has not stopped people from claiming it as a deduction...

For some, the difference means it will no longer make sense to itemize.

The State says it is loosing about 200 million in income tax through improper deductions.

The Franchise Tax Board has more information at

http://www.ftb.ca.gov/individuals/Re...on/index.shtml

Here's a link for a typical Alameda County Tax Bill showing what is and is not deductible...

https://www.ftb.ca.gov/individuals/R...eda_sample.pdf

Last edited by Ultrarunner; 02-05-2012 at 02:00 PM..
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Old 02-05-2012, 02:03 PM
 
25,619 posts, read 36,505,929 times
Reputation: 23291
Same as for vehicles. Only certain items are tax deductible.

Good call out though. I get the feeling we are going to be hearing a lot more horror stories about the jack booted thugs at FTB in the coming years as California starts shaking down the average tax payer to maintain all those Public Employee Rolls Royce pension plans and labor contracts.

Let me clarify: intensify the shakedown.

Last edited by Bulldogdad; 02-05-2012 at 02:16 PM..
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Old 02-05-2012, 03:13 PM
 
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,099 posts, read 80,155,784 times
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We moved from CA 20 years ago and that was the case then. People deducted all of it anyway, the state and IRS may not have caught it due to the minor amounts, but now they are looking for every nickel. Even back then some areas had sewer service, surfacewater management charges, taxes or fees collected for other agencies that were not supposed to be deducted from state or federal taxes. Most people simply used the "tax" amount shown on their mortgage impound or their property tax bill.
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Old 02-05-2012, 03:17 PM
 
Location: California
37,042 posts, read 41,967,329 times
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Yes. I made the vehicle tax switch a few years ago after reading an article about that. I'm having my taxes done professionally this year so I wonder what they will do? I'll bring it up, it's about $65 worth of "generally non deductible" stuff so it doesn't effect my ability to itemize either way.

A simple solution is to have a TAX DEDUCTIBLE amount highlighted on the bills themself. Now there is a chance peopel being audited will get screwd if they decided to go back recalculate everything many years back.
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Old 02-05-2012, 03:25 PM
 
28,107 posts, read 63,391,831 times
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For some... the tax bill amount that is not deductible may easily be half or more than the bill... I know some like this...

One is for a 5' wide strip of land that is for the utilities... the value of the land is $200 and the tax bill is $691.

Due to the layout or the parcel... it was not able to be combined with the adjoining home parcel...

The actual deductible amount is less than $5 on a $691 bill.

There have been attempts in Sacramento to make the bill that is subject to lien all deductible... it's not like you have the option to choose what to pay and not pay on the county tax bill...
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Old 02-05-2012, 03:26 PM
 
25,619 posts, read 36,505,929 times
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20th Century- Death and Taxes.........

21st Century- Death and Fees..........
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Old 02-05-2012, 03:29 PM
 
28,107 posts, read 63,391,831 times
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Taxes, specifically property tax and fees are what I fear most financially when thinking about retirement...

A frugal person can take steps to eliminate all debt... pay off the loans, mortgage...etc...

Property Tax is the gift that keeps giving and during the run up... I know of assessments that increased 80% in one year...

Truly frightening stuff...
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Old 02-05-2012, 04:13 PM
 
Location: Tijuana Exurbs
4,525 posts, read 12,337,169 times
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Quote:
Originally Posted by Ultrarunner View Post
Taxes, specifically property tax and fees are what I fear most financially when thinking about retirement...

A frugal person can take steps to eliminate all debt... pay off the loans, mortgage...etc...

Property Tax is the gift that keeps giving and during the run up... I know of assessments that increased 80% in one year...

Truly frightening stuff...
I have to agree that it worries me as well. Most other expenses are controllable to one degree or another, but this one isn't, except by moving. It was these uncontrolled surges in assessments during the 1970s which drove Prop 13. The state and the counties were loving it as the cash rolled in, and as taxpayer anger boiled over. That is why Prop 13 eliminated the triennial re-assessment and the power to change the millage rate, and replaced it with a 2% annual increase. It offered California retirees some predictability regarding this expense. And though Prop 13 has its flaws, now it will never be changed in any significant way. Instead we get ever rising sales and income tax rates. But Sacramento has only itself to blame.
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Old 02-05-2012, 04:25 PM
 
28,107 posts, read 63,391,831 times
Reputation: 23222
Quote:
Originally Posted by kettlepot View Post
I have to agree that it worries me as well. Most other expenses are controllable to one degree or another, but this one isn't, except by moving. It was these uncontrolled surges in assessments during the 1970s which drove Prop 13. The state and the counties were loving it as the cash rolled in, and as taxpayer anger boiled over. That is why Prop 13 eliminated the triennial re-assessment and the power to change the millage rate, and replaced it with a 2% annual increase. It offered California retirees some predictability regarding this expense. And though Prop 13 has its flaws, now it will never be changed in any significant way. Instead we get ever rising sales and income tax rates. But Sacramento has only itself to blame.
The engineer in me needs to quantify risk and mitigate loss...

Property Taxes are the wild card facing most of us... even though I was not old enough to vote when the voters made Prop 13 law... I am grateful each and everyday they did.

Income and Sales take a percentage of what is earned or spent... Property Tax just happens...
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Old 02-05-2012, 04:29 PM
 
11,715 posts, read 40,318,011 times
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Quote:
Originally Posted by kettlepot View Post
And though Prop 13 has its flaws, now it will never be changed in any significant way. Instead we get ever rising sales and income tax rates. But Sacramento has only itself to blame.
Don't be so sure about that. As California increasingly becomes a state of renters, property tax will be viewed as something the other (rich) guy pays. Its not hard to get voters to raise someone else's taxes.
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