The High Cost of Delinquent Taxes

Property tax bills must be paid no later than January 31 in order to avoid the assessed taxes becoming delinquent. This is just about the time that many taxpayers also start receiving bills for charges made during the holiday season. Thus, many taxpayers believe it is more convenient to pay other bills before the government.

However, the interest and penalties assessed against delinquent property taxes can seem enormous when compared to interest and finance charges assessed on credit purchases. While a high-interest credit card might have a rate of 18 percent per year, the effective penalty-and-interest rate for delinquent taxes can be as high as 84 percent depending on when the taxes are paid.

Also, non-monetary penalties imposed by the government for failure to timely pay taxes can deny valuable rights to a property owner.

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Help! I Can't Pay My Taxes

No matter how hard they try or how well they budget, some taxpayers find that they just cannot come up with the money to pay taxes before the February 1 delinquency date. And then with the assessment of interest and penalties by taxing units, future payment becomes even more difficult. Eventually, the taxpayer risks losing his property as the required payment climbs further and further beyond his financial reach.

But all may not be lost. There are several options that a taxpayer might consider in attempting to reduce the high cost of delinquent taxes.

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Upcoming deadlines

December 31
Last day to pay taxes for 2003 IRS deduction

January 1
Tax lien date for 2004 taxes

January 31
Last day to file special inventory declaration (retailers of cars, boats, heavy equipment, and manufactured homes)

January 31
Last day to pay 2003 taxes before delinquency

January 31
First of four installments due for senior or disabled homestead taxpayers