Tax-deferred exchange transactions can be a great way to help you manage your wealth over time. A reverse 1031 exchange is a unique type of tax-deferred exchange that applies to real estate purchases.
A reverse exchange allows you to hold onto any property that you want to sell, while still purchasing new properties in the present. Investors that utilize tax deferred exchanges are able to better take advantage of the fluctuations that occur naturally within the real estate market.
If you own multiple properties or if you live in an area with a high property tax rate, you may be wondering if there is any way to reduce your property tax bill. In a lot of cases, you may just be stuck paying the amount noted on the bill. But there are a few options. Check out these tips if you want to lower your property tax bill.
1. Ensure the assessment is fair.
If you are running a small business, it is essential to take proper care of your taxes. Without the right prep and follow-up, you could end up owing money to the IRS, which isn't a place where you want to put yourself or your business. When it comes to taking care of taxes, it is about what you do all year long, not just at tax time.
Work with An Accountant
If you currently owe outstanding federal or state tax debts, it is important to resolve these debts as soon as possible. Not only can these debts impact your credit score, but they can also result in wage garnishment, tax refund offsets, and accrued interest. Thankfully, there are several different options available to help you with tax resolution.
Pay In Full
If you are able to pay your tax debt in full, this is the simplest and fastest way to resolve this debt.
As a real estate investor, your primary goal is to make as much money as possible without paying very much, if any, money out in taxes. However, to help lower your yearly obligation, you should look at using legal loopholes that are available to you.
You may want to keep as much money in your portfolio by moving it around instead of cashing it out to your personal bank accounts. You can lower your burden to the IRS and state by using rental property 1031 tax delayed exchanges.