At the beginning of every year, Americans are taxed by the government. This money goes into multiple programs, which in turn benefit the majority. New roads, schools, and other forms of public infrastructure are just the tip of the iceberg when it comes to the difference your tax money can make. That said, they’re not the experience of a lifetime. Taxes are a lot of rounding up paperwork, filling out other paperwork, and hoping you don’t make any mistakes. Working with a tax professional may ease some of the burden, but it can’t take it all away. But the work will be worth it in the end if you know how to file your taxes correctly. Owning a home opens a new door in the tax world. Itemizing on your returns is a little extra work that will pay off in the end, maybe even in cold hard cash.
Whether you’re a new homeowner or you’ve owned your home for years, it’s crucial you know how to pay taxes on your home to avoid having your home taken in a tax sale or foreclosure. You’ll need to take into account more than just federal taxes, too. In the Bronxville Village, you should be aware of the local and state taxes you’re obligated to pay. Below is a rundown of everything you need to know about the taxes you pay as a homeowner in Bronxville Village.
Understanding property taxes
One of the biggest surprises homeowners encounter is the amount they’ll need to pay in property taxes. It’s your duty as the owner of the property to ensure you’re contributing to the improvement of your local community. It may seem daunting to understand all of the factors which go into assessing the value of your property. Fortunately, the county assessor will do this hard work for you. But in case you’re wondering what they’re going to include in their assessment, here’s a quick rundown.
The properties in your neighborhood and their values are just as important as yours. The very first thing the assessor will evaluate is the fair market value for your home. This is a combination of three approaches that help paint a financial picture of the property’s value. The main two, which are likely to apply to most properties, are the market comparison and the cost approach. The market comparison shows what prices were paid for similar homes in the area. The cost approach estimates what it would cost in labor and materials to reproduce the same building using current costs. After the assessor has collected all of their information, they’ll make an assessment on the total value and, in turn, the annual amount of property taxes that need to be paid. Note that New York law requires any property within a municipality to be assessed at a uniform percent of market value without exceeding 6% of the home’s market value. This means homeowners pay the same amount, regardless of the size of their home or lot size.
The Village is distinctive from a majority of the rest of the state when it comes to property taxes. Your home will be assessed annually by an assessor appointed by the Village Board of Trustees
. The value of your real estate is added to a list called an assessment roll, where the values of every home in the Village’s boundaries are kept and used to determine the amount you’ll be paying in property tax bills each year. When the final assessment roll is delivered to the Board of Trustees in April, you can expect the new tax rate to be adopted. The rate for 2021 was around 3.5%, with the total taxable assessed value at $3,122,461,334. When the roll is assessed, the Board ensures roughly 80% of property taxes are paid. The Town of Eastchester is responsible for the other 20%. Bronxville Village taxes go towards paying the Village and school taxes, while the Town of Eastchester’s taxes covers the town, county, fire, and extraneous taxes, which need to be paid throughout the district.
Bronxville schools taxes work similarly to the Village’s. The rate is set by the School’s Board of Trustees after a budget has been set and adopted in May. It should be of no surprise that these funds are spent on local schools. Paying teacher salaries, replacing dated supplies, and funding programs are just a portion of what your tax dollars contribute to. The current rate per 1,000 in 2021 was around 14.3%, with the taxable assessed value at $3,073,053,719. Property taxes for the Village are collected bi-annually at the treasurer’s office. Bills are sent out on June 1st and usually include payment stubs for both. The payments need to be made on June 30th and December 31st. In the instance the office is closed on one of those days, the closest business day afterward is the due date for these taxes. The school taxes are also collected at the treasurer’s office at the same time the Village taxes are collected.
Find your tax breaks
Homeowners can earn back some of their money through tax deductions if they itemize on their returns. Some come with additional qualifications the homeowner must meet or understand when looking to get the most out of their tax deductions. Some of the most common deductions may be more accessible than you think.
Perhaps the most recognizable deduction you can claim is mortgage interest. This interest is accrued when you secure a loan to purchase a piece of property, refinance your mortgage, and use your home’s equity lines of credit and home equity loans. This doesn’t have to apply to a primary residence but can also apply to a second home mortgage. Your January mortgage bill will most likely include an extra form—Form 1098—which will list the amount of mortgage interest you’ve paid throughout the year that can now be deducted from your taxes. Married households are able to deduct the first $750,000 in interest, while single individuals can deduct up to the first $350,000.
Note: Any money taken from a home equity loan that isn’t used to improve, update, or renovate your property in a substantial way.
Another deduction you may choose to list on your taxes is any points you paid to your lender when you purchased your home. Points are available to buy from the lender in order to cut down on the interest rate they’re paying for their primary home. This can be a confusing topic for some people, as there’s no universal number for what equates a point. But the amount you’ll pay for a point is easy to calculate. Each one costs 1% of the mortgage amount. However, this money doesn’t go towards paying down the principal—just getting a head start on paying for interest. Come tax time, these points can either be deducted as mortgage interest over the lifespan of the loan or in the same year they were originally paid.
To deduct any mortgage interest on your taxes this year, you must complete Form IT-196
Real Estate Taxes
Also known as property taxes, real estate taxes are annual taxes you pay on any piece of real property—or real estate—that you own. In places such as Bronxville Village, where the tax rates are assessed uniformly for the entire community, this tax is deductible up to $10,000. These taxes must
be paid to a taxing authority. If not, they need to be at settlement or closing. If you paid them when you purchased a home this past year, take note these taxes will be divided with the seller of the home to account for the portion of the year it belonged to both owners. Deduct these on the Schedule A form
when you file.
Work with a certified tax preparer
When there are so many ins and outs of figuring out your taxes and filling them out correctly, it’s easy to make mistakes. Working with a tax preparer can make the process a lot more simple and streamline the process. There are a few key things to keep in mind when choosing the best individual for you. First, make sure they’re a certified public accountant with a Preparer Tax Identification Number (PTIN)
, which must be listed on your return. Second, check to see if they’re a member of a professional organization such as the National Association of Tax Professionals or the American Institute of Certified Public Accountants. You want to work with someone you can trust, as they’ll have access to all of your most private information. Knowing that they’ll be working via a code of ethics goes a lot further than a spoken confirmation.
Looking for Bronxville Village real estate?
If you’re in the market for a new New York home, work with an experienced real estate agent who has knowledge regarding all of the best areas to find your next home. Sheila Stoltz will help you find your next piece of Bronxville Village real estate as soon as you know what kind of home you’re looking for. Contact Sheila Stoltz today
to simplify your homebuying experience!