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  1. #1

    Default Paying US Property Taxes

    For those who are properties owners in USA, may I know how do you pay for the property taxes? Do you DIY or engage a tax specalist? And should I pay under a LLC?

    Please kindly advise. Thanks

  2. #2
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    Do you mean the property taxes on each property or the tax on profit from your rental income Camel?

  3. #3
    Join Date
    Jul 2010
    Location
    Auckland City, why invest else where?
    Posts
    984

    Default

    Property taxes are paid through the County Tax Collectors Office.

    In florida you can pay online.

    If u need a tax return, then u need an accountant.

  4. #4

    Default

    Sorry for not being clear. I am referring to both the annual property tax, and also the rental income tax (in there is any).

    How can the payment be made? Is it done through the property management company? And should I purchase under a LLC or individual name? Thanks

  5. #5

    Default

    Your real estate taxes are totally separate from rental income tax.

    Real estate taxes are paid to your local county/city, and are a set expense (you don't need a tax specialist for these, it's just a bill you have to pay).

    Rental agreement income is part of your income tax that you have to declare to whoever you pay income tax to in your country (if you pay income tax in the US, then the IRS). Rental agreement income can be offset by just about any expense you incur related to your rental investment property (property management costs, real estate taxes, insurance premiums, mortgage interest, etc).

    Hope that clears things up!

    ____________________
    Brian
    Rental Agreement - Courtesy of EZ Landlord Forms

  6. #6

    Default

    Camel, I highly recommend handling the property taxes yourself. Like Brian just said, its just a bill that has to be paid and often can be paid online. I suggest holding your rental income in an escrow account and use that account to pay property taxes and insurance premiums. Quarterly or as needed you can sweep the profits of the account to your main account for whatever other business purposes you have.
    There have been horror stories in the US of management companies promising to pay the property taxes, and never following through, holding the owner responsible for the taxes and being out the money planned for it. That is an exception to the rule, but I tend to recommend on the side of caution. There are many great companies that manage in the US.

  7. #7

    Default

    The Tax Foundation ranked the states based on property taxes paid as a percentage of median home value for owner-occupied homes in each state. This is a good way to rank the states because it provides a standardized number for comparison.

  8. #8

    Default

    So has anybody figured out a way to pay a 1040 ES using BB yet? I know earlier there was some talk about sending the check to your own address made out to the IRS and then mailing it in. Has anyone tried this method with success? Thanks!

  9. #9

    Default

    Hey,

    As it was stated before in the post, the property tax is easily accessible on the county website and very from state to state.

    When it come to income tax from rental or sales income it becomes a much more difficult situation. This is how it works (Consulted about 10 diferent accountants, form within us and abroad)

    If you aren't a US Citizen and buy property under a US LLC Corporation in Delaware or Nevada you don't have to pay taxes within the US if:

    A) You are not a US Citizen and you are not a US Resident Allien
    B) You live in a country where US as Tax Treaty "Australia, New Zealand and the EU included"

    Ex: If you are a citizen from India for example and you open a LLC you will need to pay taxes in US because there is no tax treaty between US and India, same applies for 80% of the countries. The tax treaty's between the US and other country's are (Not all but almost) -> Canada, Australia, New Zeland, Most EU members (not the new ones, but the old ones, UK, France, Italy, Spain, Austria, Belgium, Portugal, Holland, can't remember the others)

    So basically if you live in Europe, Australia, New Zeland or Canada and open a LLC corporation you don't have to pay taxes in US but YOU HAVE TO DECLARE AND PAY taxes in your country where you live (Because of the tax treaty). Otherwise, if you live in a country where US has no tax treaty, you will have to pay taxes for everything you sell.

    This is the general opinion on every tax-consultant I've talked with. You will still have to file for several tax forms.

    If you are incorporating in other states other than delaware/nevada you will also have to pay taxes even if you are a non resident alien, eg: if you open your corporation in California and customer you are selling is from California you pay taxes either way.

    I hope this is helpful the tax code here can be daunting but a trusted professional always helps.

  10. #10
    Join Date
    Jun 2013
    Location
    Memphis TN
    Posts
    141

    Default

    Those LLC's are only tax free if the entity transacts no business in the US. So they all have to pay tax when they own or trade or receive rental income from real estate.


 

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