Monday, August 7, 2017

The School Taxes

The dreaded school tax bill will be here about September 1st. Last year's was $4,400.+. However we were reassessed again(it is a yearly assessment) and they raised our assessment by $ 7500. So we are planning on a $ 4500.+ school tax bill this year. This bill and the property taxes due in January runs about the same amount. We get a reduction from New York State on the school taxes which they call the Star Rebate. They also have a rebate for income qualified people over 65. However we have too much income to qualify for the Senior Rebate. The $4,400.+ bill that I stated above is the amount we actually pay out of pocket after the Star Rebate. The taxes are actually a lot higher. 

Our property taxes in January run around the same amount or a little less with no deduction because we do not qualify for any. Again we have too much income to qualify. So you can see that we are paying a hefty amount in school and property taxes a year- about $9,000. Yes, New York state is a high taxed state on everything. But it is our choice to live here so I am not whining. 

That said we set money aside all year long to pay our taxes. We invest that money(which is part of our savings every month). However, every year I try to take both the school and property taxes out of current income when they are almost due. That is because I hate the idea of selling investments needlessly. So far we have been able to do that. So for three months before these payments are due, I look to see what we can save from our monthly income each month so that we have enough to pay them. That is one of the reasons I didn't invest any money in July. So we now have the money to pay the tax bill in September. If we were strapped for that money, we could easily take it out of our investments because we save for it all year. Right now we are able to do it this way, so this is what we do because it is just easier. We saved for years and set up and worked for our retirement so that we have many streams of passive income to live off of during retirement. We have also lived frugally for years and cut where we can to make sure that we never run out of money. We have been good stewards of our money. Hubby is just starting his 18th year of retirement and it has been 22 years since I worked. And believe me when I say that we have enjoyed every minute of it.
  
I know we all hate taxes but they are a fact of life when you own property. A lot of seniors hate paying taxes since they have no children in school. That has been the case for us since 1986 when we put our boys in private schools. So this will be our 31st year paying school taxes with no child in the public schools. Would I like to not pay school taxes? Yes, if I had a choice but I don't. So my taxes subsidize the school system where my neighbors' children go to school so that their parents don't have to pay more in school taxes. But you know what? Seniors have been doing this for years even when I went to school. So we are just doing our part for the system. It's how it works.

12 comments:

  1. Because of the extremely high cost of living in the Bay area, taxes are assigned at time of sale, and then kept for the duration of the property. This is to ensure seniors can maintain their home. I'm very supportive of this obviously, but it has really challenged the local schools, as not enough houses are being sold. Currently, my neighbors pay $800/year in taxes. I pay $33K. Houses are worth approximately the same amount. Clearly the system needs improvement!

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    1. Hi Hawaii Planner,

      YIKES! $33,000. is a lot. Most people in the town just south of me pay in the $20,000- 30,000. range.
      We built in a good school district so the houses in my neighborhood sell very quickly.But we stayed away from the town south of us since I had no children at home. I would say your state needs to look at changing that.

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  2. Yes, but if you are in good school district, this increases the value and resale of your home. We had the same situation in a western suburb of Minneapolis, but we made a lot of money on the sale of that home because we were in a much sought after school district. Our school taxes were like yours. And my granddaughters go to private schools, and of course, their parents pay the school taxes, knowing that this is a personal choice to choose private education.

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    1. Hi Isabella,

      Yes, we are in a great school district and buying our home here was deliberate. Houses are selling like hotcakes in here. That is why our assessment keeps going up. It was a $20,000. increases the year before this one and it will continue going up.

      We did the private schools for our sons even though we were in the best school district in our area when they were growing up. The school had a huge enrollment which made most of the kids there just numbers. I wanted better for our children.So I know where your kids are coming from. It is a personal choice that we could afford.

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  3. Wow, I know where I won't be moving upon retirement. And here I thought taxes were high when we lived in northern VA.
    Glad that you are happy where you live, and Hawaii planner, I can't even imagine paying 33k in property/school taxes.

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    1. Hi Kathy,

      Yes, go to a low tax state unless you have grandchildren that you want to see all the time. We moved to AZ to get away from the taxes but missed the grandchildren.

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  4. Hi AD, this is Chris. I agree with you that we all need to support the education of the next generation, not just our own children. Our kids are grown too, but we usually vote for the school levies here in OH where we live, as long as the school people are being good stewards of our money, and not just being greedy.

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  5. We live in the town "south of yours" and we have had our assessment raised by $100,000 this past spring. Yes, you read that correctly. Have to admit it was on the low side to begin with, but yikes! We appealed it and were able to get it down a bit, but based on the new assessment, our taxes will go up about $800. We will pay about $11,000 total for school and town. Our schools are amazing here, so even though I no longer have any children in school, it does pay off (hopefully) on resale. It is tough to know what is a fair system when it comes to taxes, but like you, we certainly know when the bill is due!

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    1. Did they start it out low the first year you purchased it? We never had that opportunity. Some of our neighbors did but alas that got us right away.

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  6. I understand about the school taxes. Our's went up last year and I am more than willing to pay them even though we homeschooled our own children for most of their education and now 2 of my grandkids are being homeschooled also. I'm a former public school teacher and I have seen first hand how underfunding school districts affects the students and staff. Did you know that most of my teacher friends still spend about $1000 a year out of their own pockets to pay for supplies for their classrooms? That is not including any money they spend for furthering their education (which is required to keep your job).

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    1. Hi Debbie,
      New York state shells out more per student yearly to educate their children than any other state. The amount is $21,206. Our school taxes pays the rest and varies by district. What bothers me is we are 26th in the nation for the best education. You would think that spending more money than every other state would give the best education. But alas that is not the situation. Teacher salaries are so high here and that is why NYS is #1 in cost. But I have heard that our teachers here have to shell out some of their own money too.

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