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Thought you were finished? There’s another tax bill due in April

By Jeff Lazerson

3/22/18

What I think: Before we talk taxation, have you ever wondered why California first half fiscal year property taxes are due November 1 and late after December 10? And, second half taxes are due February 1, but late if paid after April 10. The fiscal year starts July 1 and ends June 30. It seems to be very uneven math. For Pete’s sake, why the need to get a headache thinking about this?

I posed that question to the good tax collection folks in Orange, Los Angeles, Riverside, San Bernardino and Riverside counties. The best answer comes from San Diego Tax Counter Treasurer-Tax Collector Dan McAllister.

“Folklore is that in the 1800’s county fiscal stewards thought its best to get paid first, before the holidays in December,” said McAllister.

According to Riverside County Treasurer-Tax Collector Jon Christensen, modern day California property taxes were first codified in 1939.

So, maybe somewhere along the way the big idea was for the counties to get paid before the Internal Revenue Service gets paid on April 15. 

The great news is that property owners are ponying up, on-time, big time! Orange County wins the bragging rights. Last fiscal year Orange County collected 99.4 percent of all secured property tax bills according to Orange County Treasurer-Tax Collector Shari Freidenrich. San Diego County is a narrowly close second. Its collection rate last fiscal year was 99 percent according to McAllister.

Did you prepay your second half property taxes?

According to the IRS, prepaid real property taxes may be deductible in 2017 if those taxes were assessed and paid in 2017. Remember the headache? The fiscal year started in July, 2017 and runs to June 30, 2018. So, if you prepaid that second half property tax bill due February 1, 2018 in 2017, you are good to go. Those taxes were assessed in 2017 even though they weren’t due until 2018.

Freidenrich points out that because of the new tax laws Orange County received almost double the second installment payment this past December compared to December, 2016.

You now have a little more breathing room for your 2018 deduction cap of $10,000 on sales, state income and property taxes.

Still owe on your property taxes? Los Angeles Assistant Treasurer and Tax Collector Kathy Gloster explained there is no charge if you pay by electronic check but there is a 2.25 percent service fee for the transaction amount if paid by debit/credit card. To be safest, go online or call your county to confirm if and what the transaction charges are.

McAllister also pointed out that a very interesting factoid-56 percent of all property taxes were paid online. And that number is growing!

If you have questions or comments, please contact Jeff Lazerson by clicking here. For more great insight make sure to check out Jeff Lazerson’s Mortgage Grader Radio Show on Sundays at 10 am on AM830 KLAA.