Guest column / Paying town taxes now may mean federal deductions in April
Published 5:36 am, Tuesday, December 13, 2011
As year-end approaches, Fairfield property owners may want to do some tax planning related to local property taxes.
Supplemental motor vehicle tax bills, the third quarter real estate tax and the second semi-annual motor vehicle and personal property tax installments are due Jan.1, 2012.
Taxpayers who will itemize deductions on their 2011 federal income tax returns -- and those who may alternate years between the standard deduction and itemized deductions -- might consider paying all taxes due before the end of 2011.
In this way, you may be eligible for an itemized deduction on your 2011 tax return, which must be filed by April 2012. If payment is not made until January, the same tax deduction can not be used until the 2012 return, which is due in April 2013, 16 months hence.
Before year end, the tax office will send out supplemental motor-vehicle tax bills to individuals and businesses for motor vehicles registered between Oct. 2, 2010, and July 31, 2011.
All vehicles registered during that span are part of the town's Oct. 1, 2010 grand list. The supplemental motor vehicle assessment is prorated based upon the length of time the vehicle was registered during the assessment year. Some special rules apply if a vehicle was traded and the same license plates are used on the new vehicle. Under these circumstances, a credit will automatically be given on the supplemental tax bill for the time the vehicle traded-in was no longer owned. This credit requires that both installments be paid on the tax bill issued last July for the original vehicle.
A pamphlet enclosed with the supplemental tax bill explains the steps to take if you no longer own the vehicle being taxed. If you registered a vehicle during the period described earlier, and you do not receive a tax bill in December, you should contact the tax collector's office to request a replacement bill. The supplemental tax bill is due in a single installment on Jan. 1.
Failure to pay tax bills when due can have potentially expensive consequences. Like all other Connecticut municipalities, Fairfield charges the state-mandated interest penalty of 1.5 percent per month --or 18 percent per year. This rate is set by the state legislature, and there is no provision in the law to waive accumulated interest, even if you fail to receive a tax bill. By far, the most common cause of failure to receive a tax bill is neglecting to notify the Department of Motor Vehicles of a change in address. Because the Town uses motor vehicle addresses provided by DMV, it is imperative that they have the correct address on file.
By law, for payments sent in by mail, the tax office must use the postal service postmark to determine if it is timely. If an envelope contains both a private postage meter mark and a postal service postmark, we are required to use the date metered by the post office.
Payment for taxes due on Jan. 1, 2012 must either be brought into the tax office or postmarked no later than Feb. 1, 2012. If payment is just a single day late, 3% of the installment due, or a minimum $2 penalty, whichever is greater, is imposed. Interest at 1.5 percent per month is calculated from the original due date, plus each fractional part of the month in which payment is actually made is considered a whole month.
To be sure you are getting the greatest benefit possible; taxpayers should seek expert income tax advice, prior to deciding on the timing of major tax deductible payments.
Stanley Gorzelany Jr. is the town of Fairfield's tax collector.