<![CDATA[MBAF - Tax Advisories]]> <![CDATA[Tax Services Advisory - Florida Corporate Income Tax Exemption Raised to $50,000 for 2013]]>
Boris Rosen

The Florida Legislature has raised the exemption from the Florida Corporate Income Tax from $25,000 to $50,000 in Florida income for tax years beginning on or after January 1, 2013.

This change will eliminate that tax for corporations with $50,000 or less in annual Florida income, thus helping many small businesses. However, all corporations with Florida income are still required to file Florida Corporate Income Tax returns.

The Legislature this year implemented the change on the Florida Corporate Income Tax as part of its annual requirement to adjust Florida laws so that calculations of adjusted federal income taxes are consistent between the Internal Revenue Code and the Florida Income Tax statutes.

Details of the adjustment in the Florida Corporate Income Tax exemption threshold and on other legislative changes that impact taxes for businesses are in a Tax Information Publication that the Florida Department of Revenue issued on May 4.

In another important change, the Legislature approved the required adjustments for determining Florida Taxable Income based on the special bonus depreciation and on Section 179 expensing that are available for the 2012 tax year.

Those adjustments are related to provisions of the federal Small Business Jobs Act of 2010. That law authorized a 50 percent bonus depreciation on qualifying assets placed in service before January 1, 2013 and authorized Section 179 expensing of up to $128,000 in tax years beginning before January 1, 2013.

In determining Florida taxable income, taxpayers must continue to add back their bonus depreciation and Section 179 deductions to adjusted federal income. But they are allowed a series of corresponding subtractions taken equally over a seven-year period

Details can be found in Rule 12CER12-1 of the Florida Administrative Code.

If you would like additional information regarding changes in the Florida Corporate Income Tax and in other Florida taxes for 2012, do not hesitate to contact our Tax and Accounting specialists or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - Millions of Taxpayers Must Determine if They Are Subject to the Alternative Minimum Tax (AMT)]]>
Boris Rosen
Ira M. Rubenstein, CPA

The IRS has reported that approximately 3.8 million taxpayers paid an Alternative Minimum Tax (AMT) for 2009, and that about 1.1 million of them had adjusted gross incomes of less than $200,000.

Thus, it is important for numerous business owners and other high-income and middle-income taxpayers to understand the requirements of the AMT, which excludes the use of many tax deductions.

Taxpayers also must know the income thresholds for determining whether they might be subject to the AMT for 2011. As part of the December 2010 tax law, the thresholds are higher for 2011 than for 2010,

In any year, you may have to pay the AMT if your taxable income is more than the AMT exemption amount and, through use of deductions and other tax benefits, your regular income tax obligation is lower than your requirement under the AMT.

For tax year 2011, the AMT exemption amounts are adjusted gross incomes above:

  • $74,450 -- married couple filing a joint return and qualifying widows and widowers (up from $72,450 in 2010)
  • $48,450 -- singles and heads of household (up from $47,450 in 2010)
  • $37,225 -- married person filing separately (up from $36,625 in 2010)
  • $6,800 -- child whose unearned income is taxed at the parents' tax rate (up from $6,700 in 2910)

On March 9, 2012, the IRS released a "Tax Tip" with details about filing requirements and other information on the AMT.

The AMT provides an alternative set of rules, without many of the regular deductions and exemptions, for calculating income tax.

Congress created the AMT in 1969, in an effort to increase tax payments from some higher-income taxpayers whose deductions resulted in them owing little or no income tax.

Because the AMT is not indexed for inflation, a growing number of middle-income taxpayers have become subject to it. The number of taxpayers that paid the AMT rose from 1.1 million for 2001 to 3.8 million for 2009, the latest year of available data.

If you would like additional information on whether you might be required to pay the Alternative Minimum Tax, do not hesitate to contact our Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - Reports from IRS, FTC Provide Added Reasons to Take Precautions for Identity Theft]]>
Mark Thaw
Ana Larias

Recent reports from the Federal Trade Commission (FTC) and the IRS provide reinforcement to all taxpayers of the urgency to take steps to make sure that they are safeguarding all of their financial information, personal and business, from potential identity theft.

The IRS on February 16 put identity theft at the top of its list of "Dirty Dozen" tax scams for 2012.

The IRS said there has been an increase in identity thieves looking for ways to use a legitimate taxpayer's identity and personal information to file a tax return and claim a fraudulent refund.

An IRS notice informing a taxpayer that more than one return was filed in the taxpayer's name or that the taxpayer received wages from an unknown employer may be the first information about that fraud.

The IRS Web site has a section on preventing identity theft and recovering stolen information.

The FTC on February 28 released its report on consumer complaints for 2011, with identity theft ranking first in the number of complaints for the 12th consecutive year. It received 279,156 complaints on stolen identities last year, a 12 percent increase over 250,854 in 2010.

That was just a portion of what the FTC estimates as nine million cases of identity theft in the United States each year.

Some identity theft numbers in the report for 2011 are alarming for businesses in Florida and several other markets where MBAF has offices, and where we can advise businesses on maintaining, updating and testing identity theft programs.

  • Florida was first in per complaints, with 178 per 100,000 in population.
  • New York, New Jersey, Maryland and Colorado ranked in the top 11 in per capita complaints--all with at least 83 per 100,000.
  • Miami-Fort Lauderdale-Pompano Beach was first among Metropolitan Statistical Areas with 324 complaints per 100,000.

The FTC Web site has a section for businesses and individuals on how to deter, detect and defend against identity theft,

Since January 1, 2011 the FTC has been enforcing its identity theft Red Flags rules for businesses that are involved in the extension and approval of credit.

The FTC can assess fines and civil penalties for violations that include not having adequate systems for detecting suspicious activity that could result in theft of a customer's identity. It has authority to review complaints and to conduct audits of businesses that are subject to its identity theft rules.

If you would like additional information on steps you can take to safeguard your business and personal financial information from identity theft, do not hesitate to contact our Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - Obama Budget Calls for Extending Bonus Depreciation, Eliminating LIFO]]>
Manuel Pravia

President Obama's federal budget for 2013 has several tax proposals that would be favorable for businesses, including an extension through the end of 2012 of 100 percent bonus first-year depreciation on purchase and placement in service of designated assets.

Under current tax laws, that bonus depreciation generally applies only for assets placed in service before January 1, 2012. The president's budget also includes new tax credits for employers on Increases in their wage expenses in 2012.

In a change that could result in higher taxes for some businesses, most notably auto dealerships, the Obama budget calls for the elimination of the use of the last-in, first-out (LIFO) accounting method, for tax years beginning after Dec. 31, 2013.

The president's budget is for Fiscal Year 2013, which begins on October 1, 2012.

On February 13, the Treasury Department released its "Green Book" summary of the president's budget. Details of business-related proposals are on pages 1 1o 11, on pages 37 to 44 and in several other sections of the document.

The president's proposal is the first step of the federal budget process. After the House and the Senate approve a budget bill, they will send it to the president who can sign or veto it.

Details of some of the Obama budget's business-related provisions:

  • Bonus Depreciation: The tax law passed in December 2010 allowed full first-year write-off of qualifying assets (such as computers, furniture, machinery and certain computer software) if they were acquired and placed in service between September 8, 2010 and December 31, 2011.
    Qualifying assets placed in service during 2012 were allowed a 50 percent bonus depreciation. The president's proposal is seeking to make that depreciation 100 percent.
  • Elimination of LIFO: Taxpayers required to change from the LIFO method would report their beginning-of-year inventory at its first-in, first-out (FIFO) value in the year of change, causing a one-time increase in taxable income that would be recognized ratably over 10 years.
  • Tax Credits on Wage Increases: Qualified employers would be provided a tax credit for increases in wage expense, whether driven by new hires, increased wages or both. The credit would be equal to 10 percent of the increase in the employer's 2012 eligible wages over those of 2011. The maximum amount of the increase in eligible wages would be $5 million per employer, for a maximum credit of $500,000.

The president's budget also included a proposal to extend the payroll tax cut until the end of 2012. The rate on that tax, which funds Social Security, was scheduled to revert at the end of February 2012 from 4.2 percent to 6.2 percent of the first $110,000 in wages.

On February 17 Congress passed a bill that keeps the rate at 4.2 percent until the end of 2012. The president signed the bill on February 22.

If you would like additional information on President Obama's proposed federal budget for the 2013 fiscal year, do not hesitate to contact our Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - IRS Proposes Information Reporting on Passport Applications]]>
Boris Rosen
Jack Brister

The IRS has issued proposed regulations that would require most applicants for new and renewed U.S. passports to provide additional information, including their taxpayer identifying numbers (TIN), on the application forms.

The proposal, issued on January 26, 2012, would establish those requirements for individuals applying for a U.S. passport other than those who apply for any of these uses: official passport; diplomatic passport; passport for use on other official U.S. government business.

Passport applicants subject to the proposal would have to provide:

  • Full name and, if applicable, previous name
  • Address of regular or principal place of residence within the country of residence and, if different, mailing address
  • Taxpayer identifying number (TIN)
  • Date of birth

Required information would have to be submitted with the passport application, regardless of where the applicant resides at the date it is submitted.

The IRS could impose a $500 penalty amount on any passport applicant who fails to provide the required information.

The proposed regulations would apply to tax years beginning on or after the date they are finalized. The IRS did not specify a timetable for when it might issue final regulations.

The proposal to require taxpayer identifying numbers on passport applications can be regarded as part of the IRS’s expanded effort to obtain information for reporting purposes on U.S. taxpayers, including those who reside or have source income outside the United States.

If you would like additional information on the IRS’s proposed regulations on providing information on U.S. passport applications, do not hesitate to contact our Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - IRS Issues Regulations on Expenditures for Tangible Assets]]>
Ira Silver
Erick Wendelken

The Internal Revenue Service (IRS) on December 23, 2011 issued regulations regarding the deduction and capitalization of expenditures related to tangible property.

The regulations, which are temporary, provide guidance in differentiating between capitalization of tangible property and expensing of repairs. In a Notice, the IRS said the temporary regulations generally are effective for expenditures made on or after January 1, 2012.

In order to comply with the requirements of the temporary regulations, many taxpayers will have to file with the IRS for a change in accounting method.

The new regulations are relevant for determining expensing versus capitalization on expenditures for upgrades or for building new facilities.

A first question is what may be expensed for acquired property. A second question concerns how amounts paid for materials and supplies should be treated.

The regulations provide answers regarding:

  • Significant modifications for Units of Property (UOP)
  • Removal Costs
  • Betterments
  • Routine Maintenance

If you would like additional information on the IRS's regulations on expenditures related to tangible property, do not hesitate to contact our Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - Florida Appeals Court Rules in Favor of Tenant on Taxation of Improvements]]>
Emilio Escandon
Brian Schlang

In a recent ruling, a state appeals court in Tallahassee determined that leasehold improvements made by a tenant at two shopping malls were not payments in lieu of rent and therefore were not subject to the Florida sales tax. That ruling and a lower court's prior ruling could set precedents for determining the applicability of sales tax for some tenants, i.e. lessees in Florida.

The First District Court of Appeal issued its decision on December 30, 2011 in the case of Department of Revenue vs. Ruehl.

The appellate court affirmed the Circuit Court of the Second District of Florida's ruling that apparel retailer Ruehl's two leases had no record of evidence to suggest that requirements for it to pay the cost of improvements were an attempt to reclassify rental payments to avoid the sales tax.

The circuit court made reference to the fact that Ruehl did not have the option to make leasehold improvements in lieu of rental payments nor was Ruehl able to take advantage of a discount on its rental payments factoring in the value of any improvements. Ruehl's rent was the same no matter the amount of money that was spent remodeling the premises.

In 2009, Ruehl filed suit to contest a sales tax payment and interest payment that the Florida Department of Revenue (Florida DOR) had assessed in 2008.

Landlords in Florida are required to pay the state sales tax of six percent on rental payments. In numerous audits of commercial tenants, the Florida DOR has determined that costs of improvements should have been considered rent. In some instances, the DOR has assessed back tax payments to the tenants.

The two courts' decisions in the Ruehl case were fact specific. Therefore, tenants that have incurred costs of leasehold improvements should consult with tax advisors to determine whether these costs are subject to the Florida sales tax.

If you would like additional information on the recent state appeals court ruling or other information on the Florida Sales Tax, do not hesitate to contact our Tax specialists or contact us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - IRS Provides Guidance for Employers on Reporting of Health Insurance Coverage]]>
Boris Rosen
Edgar Marquez

The IRS has issued Notice 2012-9 which provides additional guidance on how employers must report the aggregate cost of employer-paid health insurance coverage for each employee, beginning with Forms W-2 for the 2012 tax year.

The IRS said that the new reporting is for information purposes only, and is to inform employees of the cost of their health care coverage. The information reporting does not require any additional tax payments by employers or employees.

Provision of that information on Forms W-2 is required under the Patient Protection and Affordable Care Act of 2010.

The IRS's new Notice restates and supersedes information from previous guidance it issued, and has a series of Questions and Answers on the reporting requirements.

Clarifications and Changes include:

  • Question 3 clarifies the exemption that employers which filed fewer than 250 Forms W-2 for the 2011 calendar year have from the reporting requirement for 2012.
  • Question 7 clarifies the application of the reporting requirement to certain related employers not using a common paymaster.
  • Question 19 adds an example of how the reporting requirement does not apply to coverage under a health flexible spending arrangement (FSA) if contributions occur only through employee salary reduction elections.

If you would like additional information on the pending requirements for the reporting of information on employer-provided health care coverage, do not hesitate to contact our Tax specialists or call us at 1-800-239-1474.

]]> <![CDATA[2011 - 2012 Tax Planning Guide]]>
Miguel G. Farra

All too often, we find that individuals and businesses don't use all the deductions, credits and strategies available to reduce their tax liability. And with the large number of tax law changes in recent years, there are now even more ways to save tax — and more confusion about how to take advantage of them.

This is where Morrison, Brown, Argiz & Farra, LLC can help. We can draw on our deep knowledge of tax law and our years of tax-planning experience to help you shrink your tax bill. By reviewing your financial situation, our tax specialists can help you identify both short- and long-term steps you might take to maximize future savings. We carefully analyze your financial statements and latest return to:

  • Point out overlooked strategies for reducing your tax bite.
  • Examine how to use the newest tax-saving strategies to your advantage.
  • Explore different tax-planning scenarios to see which are best for you.

Most important, at Morrison, Brown, Argiz & Farra, LLC we understand that tax planning should support your financial goals, whether they are to save for retirement, pay for education, or leave money to your heirs. That's why we take a comprehensive planning approach that ensures your tax strategy helps you achieve these goals.

To help you see which tax reduction strategies might be best for you, we've provided a copy of our 2011-2012 Tax Planning Guide. Simply click on the link to view it or cut and paste http://www.webtaxguide.net/MBAF into your browser.

So if you're wondering whether you're getting the full benefits of tax planning and saving all you can in light of recent tax law changes, please call us today at 1-800-239-1474. We would be happy to review your situation, discuss your goals and show how we can help you minimize your taxes and maximize your financial well-being.

]]> <![CDATA[Tax Services Advisory - New State Law Reduces New York Individual Tax Rates]]>
Michael Ehrenpreis
Miguel G. Farra
Jack Brister

New York State individual taxpayers will receive tax cuts and many businesses will be eligible for lower commuter taxes and corporate franchise taxes, all starting in the 2012, tax year, under a new state law.

The law, S50002-2011, which Gov, Andrew Cuomo signed on December 9 reduces the state individual income tax rates for joint filers and single filers in all brackets.

The law also makes changes in the Metropolitan Commuter Transportation Mobility Tax (MCTMT) and the Corporate Franchise Tax on Manufacturers.

Major changes include:

Individual Income Taxes:

In taxable years beginning after 2011 and before 2015, tax rates will be the following for joint filers with these amounts of New York taxable income:

  • $40,000 to $150,000 -- 6.45 percent (previously 6.85 percent)
  • $150,000 to $300,000 -- 6.65 (previously 6.85 percent)
  • $300,000 to $2 million -- 6.85 percent (previously 7.85 percent to 8.97 percent)
  • Over $2 million -- 8.82 percent (previously 8.97 percent)

For taxpayers with other filing statuses, the top 8.82 percent rate will apply to head of household filers with New York taxable income over $1.5 million and to single filers with New York taxable income over $1 million.

MCTMT

The law excludes certain small businesses by changing the definition of "employer" to provide that payroll expense must exceed $312,500 in any calendar quarter, and it excludes eligible educational institutions.

The MCTMT, previously 0.34 percent on all employers, will be at the following rates for tax quarters beginning April 1, 2012 and before 2015:

  • Payroll expense no greater than $375,000–0.11 percent
  • Payroll expense no greater than $437,500–0.23 percent
  • Payroll expense exceeding $437,500–0.34 percent

For the MCTMT attributable to self-employed persons, the rate stays at 0.34 percent. But beginning in 2012, the tax does not apply unless the net self-employment income exceeds $50,000 versus the previous threshold of $10,000.

Corporate Franchise Tax

The law provides a 50 percent rate reduction for eligible qualified New York manufacturers for tax years beginning after 2011 and before 2015 (guidelines and criteria to be established).

If you would like additional information on the lower individual tax rates and other changes under this 2012 New York State tax bill, do not hesitate to contact our Tax Specialists or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - The Year-End Deadline is Near for Incentives on Expensing and Depreciation]]>
Frank Gonzalez

Amid their holiday celebrations, businesses should remain aware that they have only until December 31, 2011 to utilize two advantageous provisions in the tax law. These two important tax incentives were authorized as part of the economic stimulus in the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.

Business Property Expensing

For 2011, the maximum expensing, amount of tangible personal property under Section 179 is $500,000, with a phase-out level of $2 million.

Tangible property assets that qualify for this first-year expensing treatment under Section 179 of the U.S. Tax Code rather than being depreciated over their standard useful lives, include certain machinery, equipment, furniture and fixtures.

For tax years beginning in 2012, businesses will only be allowed to write off up to $139,000 of these expenditures subject to a phase-out, once capital expenditures exceed $560,000.

Expanded Bonus Depreciation

The final day of 2011 also is the deadline for utilizing a first-year bonus depreciation of 100 percent for purchasing, and putting into service, certain assets, such as machinery, furniture and fixtures as well as qualified real property and leasehold improvements.

The 2010 Tax Act had expanded the bonus (first-year) depreciation provisions to allow a full write-off of these qualifying assets, if they were acquired and placed in service between September 8, 2010 and December 31, 2011.

Under the 2010 Tax Act, qualifying assets placed in service during 2012 will continue to be allowed a 50 percent bonus depreciation, in accordance with the prior law.

Be aware that these incentives will be reduced for the 2012 tax year, and could be subject to phase-out entirely, depending upon the future actions of Congress and the Obama administration.

As such, businesses that are considering making capital investment in leasehold improvements and equipment purchases can obtain significant tax advantages by completing those transactions in 2011, rather than waiting until 2012.

If you would like additional information on Section 179 expensing, bonus depreciation and other tax incentives that are available for businesses, do not hesitate to contact our Tax Specialists or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - IRS's 2012 Standard Mileage Rates are Unchanged for Businesses]]>
Manuel Pravia
Samuel August

The IRS on December 9 issued its 2012 optional standard mileage rates for calculating the deductible costs of operating an automobile for business, charitable, medical or moving purposes. The rate for business use will be 55.5 cents per mile--unchanged from the rate that has been in effect since July 1, 2011.

Beginning on January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 55.5 cents per mile for business miles driven
  • 23 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The rate for charitable miles also is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile, from the 23.5 cent rate that has been in effect since July 1, 2011.

The IRS standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Information about the IRS standard mileage rates may be found in IRS Notice 2012-01.

If you would like additional information about the IRS standard mileage rates, do not hesitate to contact our Tax Specialists, or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - New York State Mandates E-Filing of Corporation Estimated Tax Payments]]>
Boris Rosen

As of December 1, 2011 the New York State Department of Taxation and Finance has mandated that corporation estimated tax payments (Form CT-400) must be filed and paid electronically.

Corporate taxpayers must e-file and e-pay corporation tax estimated tax payments using Form CT-400 starting December 1, 2011. Accordingly, unless your December 15, 2011 estimated tax payment has already been made, you are required to make this payment electronically.

If you need assistance creating an Online Services account, please contact your MBAF-ERE tax advisor and we will provide you with the required forms to sign.

For your information below we have supplied the details for e-filing and e-payment.

The estimated tax payments can be made using either of these methods:

Software

You can use e-file software to pay as long as your software supports it. You can pay by ACH debit or ACH credit.

MBAF-ERE software does not currently support the e-file and e-pay mandate.

Online Services account

You can pay through your NYS Online Services account without the need for additional software. You can pay by ACH debit or ACH credit.

A NYS Online Services account must be established. There is a tutorial available on the New York State Department of Taxation's website that provides detailed instruction regarding how to set-up a NYS Online Services account. To access this video:

You should have the following information available when setting-up an Online Services account:

  • Employer Identification Number (9-digits)
  • Prior period New York State tax returns for all tax types your business is required to file (corporation tax, sales tax, payroll tax)
  • PIN (5-digits) issued by the New York State Department of Tax (you may have already received this by mail, however the PIN is not necessary to set-up an account)

If you would like additional information on the e-filing requirements for New York State corporation estimated tax payments do not hesitate to contact our Tax Specialists, or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - Home Energy Tax Credits Still Available for 2011]]>
Boris Rosen
Miguel G. Farra
Michael Ehrenpreis

Homeowners have until the end of 2011 to make qualified energy-saving home improvements and obtain tax savings through the Nonbusiness Energy Property Credit. That tax savings will not be available starting in 2012.

In a notice it issued on November 21, the IRS also reported that its Residential Energy Efficient Property Credit is available to homeowners for so-called "green energy improvements" they make in 2011 and in 2012.

Here are details of the two tax credits.

  • The Nonbusiness Energy Property Credit is aimed at homeowners who install energy efficient improvements such as insulation, new windows, new doors and furnaces at their principal residence.

The 2011 credit rate is 10 percent of the cost of qualified improvements. The cost of installing these items does not count toward the credit.

Homeowners also can claim the credit for the cost of residential energy property, including labor costs for installation. Residential energy property includes certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass fuel.

The credit has a lifetime limit of $500, of which only $200 may be used for windows. If the total of nonbusiness energy property credits taken in prior years since 2005 is more than $500, the credit may not be claimed in 2011.

  • The Residential Energy Efficient Property Credit is designed to spur investment in alternative energy equipment.

The credit equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines and fuel cell property.

No cap exists on the amount of credit available except for fuel cell property. Generally, labor costs are included in the credit.

Eligible homeowners can claim both of these credits on Form 5695 Residential Energy Credits when they file their 2011 federal income tax return.

Because both of these potential tax savings are credits and not deductions, eligible taxpayers can claim them whether or not they itemize deductions on Schedule A of tax returns.

If you would like additional information on the Nonbusiness Energy Property Credit and the Residential Energy Efficient Property Credit, do not hesitate to contact our Tax Specialists or call us at 1-800-239-1474.

]]> <![CDATA[Tax Services Advisory - Discounts Available for Early Payments of Property Taxes in Florida]]>
Daniel Flugrath

Florida taxpayers have a deadline of March 31, 2012 for paying their 2011 property taxes. But those taxpayers should be aware that discounts of up to 4 percent are available if they make early payments.

Under Florida laws, the discounts for early payments made during the following months are listed below:

  • November - 4 percent
  • December - 3 percent
  • January - 2 percent
  • February - 1 percent

Locally elected officials administer Florida's property tax system under general supervision of the Florida Department of Revenue (DOR).

County property appraisers in Florida counties establish a property's market value on January 1 of each year. Then they subtract all valid exemptions and classifications to determine the property's taxable value.

In August, the county property appraiser sends each property owner a Notice of Proposed Property Taxes, or "TRIM" notice. This notice contains the property's value on January 1, including any exemptions. It provides the millage rates proposed by each taxing authority and an estimated amount of taxes owed based on those millage rates.

Tax collectors in Florida counties send annual tax bills to property owners in late October or early November. Full payment, minus any discounts for early payment, is due by the following March 31.

If a property tax bill is not paid by March 31, the tax collector in a Florida county may sell a tax certificate on that property to collect the taxes that were not paid. A tax deed on the property may be sold if the property owner has not paid all back taxes, interest, and fees within two years.

In addition, if a taxpayer fails to pay 2011 property taxes by April 1, 2012 the DOR's Value Adjustment Board is required to deny that taxpayer's petition filed in dispute of the property valuation assigned by its county property appraiser.

If you would like additional information about discounts on property taxes in Florida or other information about the state's property tax system, do not hesitate to contact our Tax Specialists or call us at 1-800-239-1474.

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