Understanding Your Tax Bill
Lexington residents get real estate tax bills four times a year, and excise tax bills for other property (automobiles, trailers, etc).
The Real Estate Tax Bill
Residential real estate tax bills are mailed quarterly. Residences are assessed at their fair marker value on Jan 1st, the fiscal year begins July 1st, and the tax rate is set by the Board of Selectmen in December of the same year.
- The first two real estate tax bills mailed in July and Oct represent preliminary estimates (since the tax rate is not known until December).
- The last two tax bills, mailed in Jan and April, are different in that they:
- List the assessed value and the tax rate at the top left
- Are computed so the total of the four tax bills equals the assessed value times the tax rate[1].
The tax bill includes a Community Preservation Act surcharge, which is up to 3%[2].
Federal Tax Deduction of the Real Estate Tax
Real estate taxes, including the CPA surcharge, are deductible on the federal income tax, provided deductions are itemized[3]. The real estate tax deduction is not allowed when calculating the AMT[4].
References
- Residential Property Tax and Property Assessment Explainer, by Vicki Blier (TMMA)
The Excise Tax Bill
Excise tax bills are mailed once a year, in Spring. A separate tax stub is mailed by the Lexington Collector of Taxes for each motor vehicle customarily kept in Lexington[5], unless the vehicle is exempted from excise tax [6]
Excise taxes are in lieu of local property tax. The excise tax rate is set by the state[7]. Valuation is computed by the Registry of Motor Vehicles[8], but may be abated by the Lexington Board of Assessors[8]. Payment is made to the Town of Lexington.
Federal Tax Deduction of the Excise Tax
The excise tax is deductible on the federal income tax, provided deductions are itemized[9]. The excise tax deduction is not allowed when calculating the AMT[4].
References
- FAQ for motor vehicle excise
- How the motor vehicle excise tax is computed
- Motor Vehicle & Trailer Excise Tax Manual
Notes
- ↑ Plus CPA surcharge, and adjusted by exemptions and deferrals.
- ↑ See the Community Preservation Committee homepage (last accessed Dec 7, 2013). Lexington has adopted the Community Preservation Act (CPA) on March 6, 2006. The Commonwealth matches a portion of the CPA surcharge, but the amount changes each year.
- ↑ IRS Publication 530 (2012). See section on Real Estate Taxes.
- ↑ 4.0 4.1 Alternative Minimum Tax: Common Questions, TurboTax Instructions (last accessed Dec 8, 2013): "In calculating the AMT, you cannot take itemized deductions for state and local income tax, real estate taxes and personal property taxes, even though these are deductible on your regular return."
- ↑ Motor Vehicle & Trailer Excise Tax Manual, section Place of Assessment
- ↑ Motor Vehicle & Trailer Excise Tax Manual, Exemptions.
- ↑ Motor Vehicle & Trailer Excise Tax Manual, Calculation of the Excise Amount.
- ↑ 8.0 8.1 Motor Vehicle & Trailer Excise Tax Manual, Role of the Registry of Motor Vehicles in administration of the motor vehicle excise.
- ↑ Boston.com: Is vehicle excise tax a proper write-off for itemized tax deduction? (last accessed Dec 8, 2013)