DQOTD: When Would You Pay?

[Midpack]

Our property taxes are due Sept 1, and that’s when I’ve paid them every year.

Yesterday talking with friends who all said they don’t pay until late Dec. One said I don’t know anyone who pays before then. I said “I do” and they laughed. And the statements quoted below is printed all over the county tax collectors online and hard copy docs.

I’d noticed interest didn’t accrue until Jan, but it never occurred to me to pay after the published “due date.” I just assumed waiting was a grace period for folks who needed more time to save up to pay…

Too soon old, too late smart?

[Real Estate Property Tax] Bills are due Sept. 1, 2023, and must be paid by Jan. 6, 2024, to avoid interest. No interest accrued until the first week of the following January. Delinquent taxpayers are mailed notices in February and advertised in the [metro newspaper] in March or April.

 

[Texas Proud]

We get the tax bills early but I do not have one to look at and online they do not have the actual bill...


Ours do not get late fees or interest until after Jan 31.... but if you want to deduct for taxes then you have to pay by Dec 31...


In the last few years with zero interest it made no difference (well, except not wanting to pay the tax man)... but now it does..


I would hold on until the last...

 

[SecondCor521]

It varies by taxing district I'm sure, but now that my property taxes have no income tax impact for me and because my taxing district permits it and it's evens out my cash flow, I pay half in December and half in June.

 

[levindb]

You may want to look at your current tax situation, and whether you are itemizing deductions. There may be a benefit to pay your property taxes twice in one calendar year and then pay no taxes the following year. This could mean itemizing in the even years, for example, and then taking the standard deduction in the odd years.

Another thing you may want to group like this would included charitable donations, paying in December vs January, for the same reason.

Finally, estimated state/local income taxes, which may be due mid January, could also be paid in December to provide a larger itemized deduction in alternate years.

 

[steelyman]

It’s the same schedule here. I’ll probably pay in full by mail in September. Get it out of the way.

 

[ncbill]

Annual taxes here.

Home paid late December.

At another property the county offers a 2% discount if paid by September 1 so they get paid as soon as I get the bill.

With no mortgage we don't itemize anymore.

 

[jollystomper]

I would pay it by Sept 1. I do like things like this hanging over my head, so to speak.

Our property tax bill arrives in July, and we pay it by September 30. If we pay it in either July or August, I get a very small discount (e.g. this month $24 off of a $5,530 bill, yipee!). After September interest accrues but it is not considered delinquent until after the end of February the following year. There is also the option to pay in 2 installments (no interest on the 1st installment if paid before September 30th).

Before the current tax law, we could fully deduct our combined state and property taxes as they exceeded $10K. Sometimes I would wait until year end to pay the bill, to increase my itemized deductions. These days, with the $10K cap, it does not make sense to do that anymore.

 

[aja8888]

We have a few month grace period here in Texas for paying annual property tax and I take full advantage of it!

 

[OldShooter]

Boy, I do like that payment schedule. Our property taxes are half due May 15 and half due October 15 with large penalties for even one day late, several percent of the tax due.

 

[SloHan]

OP If you wait to pay you will pocket a few months of extra interest income on the amount.

Our Real Estate tax is billed Quarterly. If not paid by the due date then a late fee is applied immediately and interest is applied on any outstanding balance after 30 days. I schedule online banking to pay the bill a few days before the due date and avoid the pesky late fee.

 

[MissMolly]

Our tax bills come out in Oct/Nov and are due in December. If paid in November there is a 2% discount. If paid in December - face amount. If paid in January, 5% penalty. If paid Feb - Apr there is a 21% penalty. After that they are delinquent and are advertised in the newspaper and begin accruing interest on top of the penalties

 

[scrabbler1]

You may want to look at your current tax situation, and whether you are itemizing deductions. There may be a benefit to pay your property taxes twice in one calendar year and then pay no taxes the following year. This could mean itemizing in the even years, for example, and then taking the standard deduction in the odd years.

Another thing you may want to group like this would included charitable donations, paying in December vs January, for the same reason.

Finally, estimated state/local income taxes, which may be due mid January, could also be paid in December to provide a larger itemized deduction in alternate years.

They call it "bunching" and for a few years (before the 2017 TCJA) I did it with my 4th quarter estimated state income taxes, the only quarter I paid them, so I could pay 2 of them in one calendar year then pay none in the next calendar year. It saved me a few hundred dollars despite some offsetting effects in the off years.

 

[MarieIG]

I pay my property tax (both halves) within a few days of receiving the bill. (Taxes are numero uno on my budget.)

Now, more often than not, my property tax bill meanders into my mailbox after the due date (but before the grace date).

My property tax (school portion) coincides with the timing of my homeowner's insurance bill. Yay. (If anyone was wondering that was a very tepid, lack luster, unenthusiastic yay.)

 

[CardsFan]

I pay all bills not on autopay, including RE taxes, when the bill arrives. Just easier than trying to remember, or setting a calendar reminder.

 

[Kings over Queens]

Our taxes are billed and paid quarterly.

August payment can be paid by 8/22, with no interest.
November must be paid by 4pm on 11/13, or they go to tax lein.
February must be paid on 2/12/14
May on 5/10/14

No option to pay 2 x per year unless I want to pre-pay. No discounts for pay in advance.

 

[braumeister]

I pay my property tax (both halves) within a few days of receiving the bill.

Similar here. I normally get the bill in early November.
Paid by the end of the month, no penalty.
Paid after, up to the end of December, 2% penalty.
Up to end of January, 7% penalty.
Up to April 15th, 23% penalty.
After that, I really don't want to know what happens.

 

[mystang52]

We pay our August bill, which is 1/4 of the estimated annual, when it's due. When we get the final bill with the 3 quarterly bill amounts, we schedule the payments on our Bill Pay for the due date. Like the OP, here in NJ we have a generous grace period, except ours is........10 DAYS.

 

[JoeWras]

It is funny that OP opens this thread. I'm in the same state, and most counties follow the same rules. I've been staring at the bill, wondering like OP.

For years, I have just paid it in summer. Who cares, low interest rates. But now. Hmm. If I wait until mid-December, I can make an easy $40.

I just don't want to forget.

 

[jazz4cash]

Ours are due 1/2 on Sept 30th and 1/2 Dec 31st so it does not apply to me. I pay online at the county website. They charge $1.49. It’s a debit to one of our checking/savings accounts. I pay a few days before the deadline. Our taxes are very high. If I could defer the 1st half payment for 3 months it would earn ~$40 in interest. I don’t like having bills hanging over my head but I’d take the $40.

 

[badatmath]

I pay immediately but my checking account earns no interest and taxes are not high.

 

[Aerides]

We pay in December.

Back when we had an FA, he said to review our probable taxes - if we expected to itemize, that would be a good year to pay on Jan1 and Dec31 - basically double up the property taxes in one year.

But we never do. We usually pay in mid-december, DH has a google reminder.

 

[PaunchyPirate]

My tax bills are mailed the first week of March and August. If you pay in March or August, there is a discount. I usually pay them the same day I receive the bill in person at our city admin building.

Also, I typically pay all bills as soon as I get them. Off my plate and done.

 

[cathy63]

Ours are due Nov 1 and Feb 1, but no late fees unless they're paid after Dec 10 and Apr 10. I usually pay them around Dec 7 and Apr 7 so I can make sure the payments went through and go drop off a check if there's ever a problem (that has never been necessary).

Based on experience as a tax preparer, I'd say something like 15% of people pay both installments at the same time between Nov 1 and Dec 10, and the rest pay closer to the due dates. I love tax clients who pay both installments before the new year every year. They save me a ton of time looking up the prior year's bills on the assessor's website since nobody ever remembers to bring those in.

 

[jollystomper]

OP If you wait to pay you will pocket a few months of extra interest income on the amount.

For years, I have just paid it in summer. Who cares, low interest rates. But now. Hmm. If I wait until mid-December, I can make an easy $40.

Could not help checking what I would net forgoing the early discounts. At current rates My net gain paying on time instead of early would be $20.

Paying after the due date my county now charges 1% monthly interest . So it is worth paying the bill before the interest starts.

 

[youbet]

Now that interest rates on idle cash are higher, I'll have to ask DW when she pays the property taxes. I can't imagine it would make much difference, at least any difference tht would be worth more than a moment's thought ........