What are Tax Assessments?

Carol Francois

A tax assessment is an impartial determination of the value of an item for the purposes of assessing the tax. Tax is a tool used by governments to obtain a portion of the funds from certain types of transaction. Taxation is the primary source of revenue for governments. These funds are used to pay for the cost of government services.

Governments asses property taxes based on the value of real estate.
Governments asses property taxes based on the value of real estate.

There are four types of tax assessments: property, customs, income and sales. Each of these four activities are completed by the citizens of the country. These taxes are all considered transactional, as they are applied at the point when the exchange of goods or services occurs.

Property tax assessments are conducted by the recipient of the property tax income. This is usually the municipality or city that the property is located in. Property can include real estate, art, antiques and other valuable assets. The vast majority of property taxes are real estate.

Customs tax assessments are usually conduction at boarder points, airports and shipping yards. Goods being brought into the country are assessed a tax value. The amount of the tax depends on the item's class. Most countries assign sales tax to imported items to ensure that there is no tax advantage to purchasing items from another country.

Income taxes are assessed based on your reported income and annual personal income tax filing. The amount of tax you pay is based on your gross income, personal situation, investments, expenses and location. Each state has their own income tax value, which is used in addition to the federal amount.

Sales taxes are usually a flat rate, based on specific classification of items. Tax auditors check the records of businesses to ensure that the taxes are being calculated correctly and remitted to the government on a regular basis.

Tax assessments are usually carried out by trained accountants who work for the government. Every Certified Public Accountant (CPA) is required to complete at least two courses in taxation. They are familiar with all the rules and procedures that govern tax assessments.

The role of a tax auditor is to confirm that procedure is being followed and that the tax laws are being applied equally to everyone. Through a process of auditing or confirming the tax assessments and remittances, the method of tax collection is validated. Tax laws that are not applied uniformly and consistently are open to court challenges. If a tax law is found to be biased, it can be struck down by the tax court judges.

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Discussion Comments

anon285766

@JessicalLynn: Your employer doesn't decide how much taxes get taken out. You do when you fill out your W4 upon hire. If too much is being taken out, then you can ask to redo your W4 and decrease the withholding (i.e., claim higher exemptions).

JessicaLynn

@strawCake - You sound a bit paranoid. I highly doubt that there is some conspiracy by the government to assess property at a higher value to get more tax money. The whole idea is ridiculous!

Anyway, sometimes I question the way income tax is assessed. I seem to always get money back at tax time. I'm pretty sure this means my employer is doing it wrong, because if I was being taxed at the correct rate, I shouldn't get anything back or owe anything!

strawCake

I find it kind of funny that tax assessors are supposed to be impartial, but accountants who work for the government usually do the assessing. This does not sound impartial to me.

In fact, it sounds the opposite of impartial. If the property or whatever is assessed at a higher value, the government gets more money from the person who owns it. It wouldn't surprise me at all if the accountants who do the tax assessments are instructed to add a few thousand more dollars onto the appraised value of the home. This would get the government more money, after all.

Mykol

@andee - There have also been many property tax assessment appeals in our area of the country as well.

Because I don't know much about how this process works, and was a little intimidated about going before a review board, I hired a real estate professional to represent me when I protested our tax assessment.

He gathered all the current information and comparable information from home sales in the area. He was very professional and knowledgeable.

This man tells you up front what he thinks your chances of getting your assessment lowered are. If this doesn't happen, he will refund half of the money you paid him, so I figured it was worth the chance since he was doing all the work.

The day of our hearing, I went with him as he presented all the facts and figures. We had to wait about 6 weeks before getting our results back, but our assessment was lowered which meant we also had lower taxes to pay.

andee

Every year we get a real estate assessment from our county assessors office. This tells us what the assessed value of our property is, and what our estimated property taxes will be for the year.

What has been frustrating is when the assessed value of our home has decreased, but our property taxes have increased. This didn't make any sense to me.

When I talked with my neighbors, I found out some of them were appealing their tax assessment hoping their property taxes would decrease.

There is only a small window of time every year when you can do this, and this was still open, so that is what we did. We were able to get our assessment changed so that we didn't have to pay as much in taxes as we previously did.

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