How to Appeal Your Property Taxes and Why You Should Consider it Every Time

While housing prices in many communities have fallen, many local governments have failed to adjust their property tax valuations, meaning that many taxpayers still have homes with assessments based on the market’s peak in 2005 and 2006. Add that to the continued financial threat from a slow job market and stagnant pay raises, and expensive tax bills can put a considerable crimp in your financial picture.


What can you do? Appeal. A successful effort could potentially save you hundreds, perhaps thousands of dollars if the municipality doesn’t raise the tax rate at the same time – a higher tax rate can actually blunt any savings from an appeal.

But appealing your property tax rates should be done whenever reassessments happen, and not just in bad real estate markets. It may sound like a pain, but it’s actually one of the most important educational exercises you’ll ever do regarding your finances. The appeal process keeps you better informed about what is probably your biggest asset and the other properties in your neighborhood. It’s important for you to do the necessary research every assessment period and appeal whenever you believe you have a case.

The basic appeal process involves looking for discrepancies in your taxation board’s math and documenting comparable properties close to yours that are actually paying less in taxes than you do.

Should you always do it yourself? You certainly have the option to get help. In most communities, consultants, attorneys and real estate agents have formed businesses that will appeal your taxes for you. But many will charge up to 50 percent of the first year’s successful reduction. It is also possible that some appeals boards are more likely to consider appeals from individuals.

In any event, the first stop in the process is at your local assessor’s office or website for the forms you’ll need to appeal. You will also find records where you can get an idea of what valuations are on comparable properties similar to yours. It’s generally recommended that you assemble five or more convincing examples to prepare your case.

Key tips:

Recalculate your bill: Property taxes are based on a percentage of a property’s value multiplied by a tax rate set by the local government. Yet government isn’t infallible, so check that your property description is accurate and that the bill makes sense. Make sure that basics like the number of rooms, baths and other key features look exactly like what you own.

Don’t take a bath on a renovation: While renovations tend to bump up the market value of a home and therefore its valuation for tax purposes, there might be some wiggle room on various additions and renovations that are not habitable year-round and therefore not equal to a new full-time space.

Wear and tear can save money: If you can prove to an appeals board that your roof leaks and you haven’t been able to afford to fix it, that your windows need replacement or if there’s a local nuisance like a major road project nearby, there might be an argument to lower the value of a home.

Get help if necessary: Again, there are law firms and other entities that can essentially field the process for you. But check the fees and make sure your appeals firm has a solid record. And ask to see any materials they accumulate on your filing.

Don’t let the fact that you’ve never appealed keep you from trying: There may be opportunities to eliminate key inequalities in what you’re paying no matter whether or not you’ve ever appealed before. It may be a daunting task, but these days, the chance to save money is paramount.

Keep deadlines in mind: Check the calendar. Make sure you file your appeal in advance of any critical deadlines that will allow you to lower your payments faster. Your newspaper’s real estate section should make you aware of any appeal deadlines in the county where you live.

If you’re doing it yourself: Ask for proper advice in putting together a proper application and rehearse your presentation before you make it. Consult local newspaper reports that discuss the process, and organize your questions if you have to go down to the county building for advice or forms. And be polite if you do – employees for the local assessor’s office tend to be very busy during appeal season.

August 2010 — This column is provided by the Financial Planning Association® (FPA®) of Puget Sound, the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Puget Sound if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.

Working Abroad Requires Some Detailed Planning

Working abroad is no longer something someone does during the course of a traditional career. College internships increasingly involve overseas appointments. Many college graduates seek work-abroad experiences before they even start their careers, and many retirees consider overseas work and volunteer assignments as part of an “encore” career.


For example, The Peace Corps reports that 5 percent of their volunteers are age 50 and over, and that’s a number that’s growing.

Whatever the reason you may be considering a work-abroad experience, remember there’s a necessary financial planning component that’s as individual as you are. A work-abroad assignment of as little as six months may have important ramifications for your overall financial planning, affecting everything from your current living space to tax,, retirement and estate issues.

That’s why the first move you should make after making the big decision to pack up and go is a call to your tax, estate and financial advisors.

First of all, just because you’re skipping off to work full-time in another country, don’t think you’ve cut ties with Uncle Sam. As long as you are an American citizen or a resident alien, you will be responsible for filing a return with the Internal Revenue Service (IRS) every year, and the paperwork can be complex.

Here‘s some general information to consider if you’re thinking about an overseas move:

• Uncle Sam might give you a break: The IRS has rules that prevent U.S. citizens from paying taxes in the United States and the foreign country where the citizen works. The foreign earned income exclusion addresses the most common risk of double taxation on wages and self-employment income earned abroad.

• To qualify for the foreign earned income exclusion, a U.S. citizen or resident alien must have a tax home (your main place of business, employment, or post of duty, regardless of where you maintain your family home) in a foreign country and income received for working in a foreign country, otherwise known as foreign earned income. The taxpayer must also meet one of two tests: the bona fide residence test or the physical presence test. For tax year 2010, the maximum foreign earned income exclusion stands at $91,500, with a base housing allowance of $40.11 per day, or $14,640 for an entire calendar year.

• If you work in a country that charges no income tax, the exclusion becomes particularly valuable because once the first $91,500 is removed the first dollar of taxable income is taxed in the lowest income bracket. That means there’s a chance you might pay less tax than if you had stayed home and earned all that money in the United States.

• You may also qualify for separate housing cost tax credits and deductions that will bring down that overall income deduction.

And because many multinational corporations create “tax equalization” packages for employees working abroad that charges employees the tax amounts they would have paid in the states while picking up the entire tax bill in the U.S. and the overseas location. It’s important to make sure, however, that employers are figuring in all the potential taxes you’d pay for benefits like an overseas housing and your kids’ school allowance, relocation fees, childcare and other perks possibly related to expatriate work.

Even if you’re working for one of the most employee-friendly companies on the planet, it’s important that you bring your own tax advisor into the process to make sure all your bases are covered.

Be wary if you’re self-employed: Some countries have special laws that govern taxation for self-employed individuals that may result in U.S. expatriates paying special taxes for the self-employed. There may be reciprocal agreements between countries governing such tax issues, but that’s why self-employed people in particular should seek out help from qualified tax professionals on managing tax and spending issues abroad.

Get advice on record-keeping: If you’ve been lackluster at keeping track of your financial activities while working in the States, it’s time to change your ways. Get advice from your tax and financial planning experts on the best ways to sort and keep financial records either physically or on computer. And since you might be tempted to ask more questions about the care and feeding of your finances while you’re abroad, ask your professionals what it will cost to have these discussions and whether there’s anyone you can talk to where you’re going.

Update your estate plans: Whether you’ll be stationed in the lap of luxury or a remote African village with no running water, it’s important to have an up-to-date will, health and financial powers of attorney and any country-specific legal documents to ensure proper care of your money and assets should you become incapacitated or die. This is why it might also be important to involve an estate attorney with international experience in this process.


Take time to review your real estate options: Given the continuing sad state of real estate in many U.S. communities, a quick sale of property before you pack up and go may not be possible. So explore the tax consequences and management responsibilities of renting out your property before you go. And by all means, make sure you have enough set aside to pay monthly mortgage, insurance and upkeep bills and a foolproof way to make sure those bills get paid on time in your absence. You don’t want to destroy your credit rating in your absence. Also discuss your overseas status with your insurance agent since renting out your property or leaving it empty could affect your premiums. Also, make a security plan for your property whether it’s occupied or not – an alarm system might help, but it’s important to inform trusted family members and neighbors as well.


Make a disaster plan and designate your point person back home: If you’ve done your homework on estate issues, this person might also be the executor of your will, but it’s important to have one trusted person back home as a central conduit if anything goes wrong for you abroad or if an emergency happens at home. In any event, this person should be an individual you trust to go through your mail, contact loved ones or possibly make health or money decisions on your behalf. Start by making a “worst-case scenario” list and work backward to prepare for such problems, including designating who might be your best representatives for health, property and money issues back home.

August 2010 — This column is provided by the Financial Planning Association® (FPA®) of Puget Sound, the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Puget Sound if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.

Making Sure Your Departing College Student is Properly Insured

Clothes, check. Laptop, check. MP3 player, check. Insurance? Better check.


Before you cram the last of your freshman’s personal effects into the SUV, it’s important to check whether they have adequate insurance coverage for their personal items, their health and their car whether or not they’re taking it to campus.

It’s not a good idea to assume that all personal coverage will simply travel with your child to school. More than ever, health as well as property and casualty insurers are going through claims with a fine-tooth comb, and the worst time to wonder if they’ll pay is when your student actually has a problem.

So in the weeks before they leave, call your agent and review the following:

Health coverage: If your child is already on the family plan, by all means, keep them there. This is an even better option today because the passage of the Patient Protection and Affordable Care Act – better known as the landmark health reform passed earlier this year – allows children to stay on their parents’ plan until age 26. This provision goes into effect next month and is particularly important for students who have taken time off or are continuing their education in graduate school.

But keep in mind that if your child goes out of state, it’s likely they may not get the coverage they’re enjoying now, particularly if you’re enrolled in a health maintenance organization (HMO) that doesn’t cross state lines. Likewise, if you’re covered by a preferred provider organization (PPO) with the only in-network doctors where you live and nowhere near campus, that could present an expensive problem if your child becomes seriously ill out-of-network.

If for any reason you find that family insurance does not apply, check out various health plans that might be offered on campus. Plans are available that cover everything from accidents to major medical needs, and see what makes sense for you and your child. You can also consult with an independent insurance agent to buy a separate policy for the student, but make sure you compare the cost and coverage with other available options.

Other options include qualifying for Medicaid if your family meets certain income or circumstantial requirements. It also makes sense to investigate your state’s Health Insurance Pool that would cover high-risk conditions for a student not covered by conventional private insurance. Beyond that, there are community-funded health centers and public hospital emergency rooms, which are not the best resources for extensive care.

And while this is not an insurance issue, it’s always a good idea to research the various medical centers near campus to check their size, quality or fit with any chronic treatment issues your student might face. An emergency is no time to wonder if your child is getting the best quality of care.


Property coverage: Check your home insurance policy to see if your coverage extends to a child’s property within a school dormitory. Some insurance policies extend around 10 percent of your total home contents coverage to dorm property. If your child ends up in off-campus housing, consider rental insurance. If your child has a lot of valuable computer equipment or other expensive technology, you might need to pay extra to boost your insurance or acquire a separate rider that might extend to campus. Every insurance company has different rules, so check.


Auto coverage: As long as the car doesn’t travel to campus, you’ll likely save money on your premiums if your child’s campus is more than 100 miles away because he or she will be home on rare occasions to drive the car. If the child takes the car to school, make sure your agent knows exactly where the car will be because location is relevant to premium cost. If the school is in a tough neighborhood, your premiums will likely adjust upward – so it’s worth making that call ahead of time before letting your child to take the car to school in the first place. Above all, keep your child on your policy unless they’re officially on their own, because even though children of driving age are expensive to insure, their portion of the bill will likely be lower based on multi-policy discounts if you keep your car, home and other insurance with the same company.



August 2010 — This column is provided by the Financial Planning Association® (FPA®) of Puget Sound, the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of Puget Sound  if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION. The marks may not be used without written permission from the Financial Planning Association.