Finance Tax Time

1. Gain new professional and marketable skills while working at your own pace. - Every year there is a noticeable shortage of qualified Tax professionals. All 4 of the major Tax service Franchises (H & R Block, Jackson Hewlett, Liberty Tax, and Instant Tax) set up tax classes to increase the possibility of having enough tax professionals to work in their Franchises. Unfortunately, having taught these basic tax classes, the student drop out rate is high. It is serious pressure to work a full time job, learn tax law/codes, go to school two nights a week, do your homework, and prepare for Thanksgiving in the middle of the Tax Class Schedule. Online Tax School could be a life saver, especially if you have children. (Instant Tax does offer training starting any time of the year)

2. You can be enrolled, trained and certified to do Taxes in the state of California or any of the 50 States by the time the big boys offer their $200 Tax Class in September, October or crash course in November.

3. Train to the state of California’s standards. Not all states have a mandatory requirement to obtain a Tax License, however, once you qualify under California’s standards you will be qualified for an entry level position with IRS or to work for one of the major Temporary Accounting Agencies, such as AccountTemp or Accountants, Inc or Robert Half, International or a CPA or a Major Bookkeeping Company or to work for your self. Being able to take your time and learn at your own pace is extremely important when it can mean the difference of $7.50 per hour and $18 to $25.00 per hour

4. When you enroll in an Online Tax class, you don’t have to deal with class room dynamics, you just do your course work, take your test on line, email your teacher if you have a question and receive your certificate and follow through with your State’s requirements for Tax Professionals and of course register with IRS. No Problem, No fuss. All the information is provided in the class.

5. Taxes Will Travel a mobile Tax Service in the San Francisco Bay Area actually provides job placements for graduates from its Online Tax School and is one of the only mobile tax service Franchise available in the country. The TWT curriculum is provided by Educational wholesalers located on the East Coast. The Wholesaler for the learning material actually holds the licenses for the different state qualifications. The uniqueness of these programs comes with the policy and procedure of the different online schools.

6. Completion of Tax School will enable you to start your own tax business in your home or office. This will enable you to charge up to $50.00 per hour and in some cases much more if you go on to become an Enrolled Agent.

7. Online Tax Schools that can qualify you for California’s standards range from $199 to over $1500. Its very interesting because, remember the Educational Wholesale Provider I spoke of? They usually provide the training for over 50% of the Online Tax Training.

8. Tax School won’t make you rich, but it will give you options, a foundation for a new career and around $7,500 to $15,000 more income per year working part-time. The Big Boys, as I call them often pay their employees Bonus based upon the revenue after the Tax Season ends, plus they get a base hourly wage.

9. Enrolling and completing tax school will put you in the line up for what I call the “Half-Year Tax Professionals” They do taxes 5 or 6 months out of the year and spend the other half of the year traveling. How do I know? I meet them at the IRS Tax Professional Forum which is usually held in large cities such as Las Vegas! They adjust their travel schedules to accommodate and attend the IRS conventions; after all, you have to act like you work all year! This select group of people is the envy of all of the new tax professionals. However, you should know these Tax Professionals work hard and smart. They rarely loose a client, they send birthday cards to clients and gift certificates for special occasions and quarterly tax newsletters. They spend years building their client base while charging $150 to $200 (sometimes more) per tax return. They tend to stay out of their client’s personal lives and they live modestly while traveling to different parts of the world each year. (I personally give my client’s a gift when I deliver their taxes. My clients are spoiled, they don’t know what it is to sit in a tax office and wait. For them Taxes Will Travel is the way to go!)

10. There is a new, service that has consumers in the tax industry buzzing. It’s the “get your refund the last week of December or the first week of January” If your last pay period for the year is December 15 through the 28th and you had your taxes completed at one of the tax stores that provides this service you can get your refund, using your paycheck stub, before Christmas or New Year’s. At the time this article was published more information was still becoming available on this new service. This will surely generate more excitement in the Tax Industry. Tax stores more then likely will charge a little more for this unique service, and a little more times 5 to 10 million people is a LOT more, so this might be the time to enroll in your nearest online tax school.

Cassandra teaches basic tax classes in the San Francisco Bay Area. The balance of the year she can be found working in her small tax service providing tax resolution and accounts receivable lines of credit for small businesses.

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EQUALIZATION ORIGIN

Equalization for State school aid purposes is the process of determining the aggregate true value of all real property in each of the State’s 566 taxing districts. This figure is established by a program of assessment to sales ratio analysis. The aggregate true value of real property, together with the value of second class railroad property and the assessed value of locally assessed business personal property, is known as the “equalized valuation.”

The present equalization program had its origin in 1954 when a considerably expanded State aid program for education was enacted, with the distribution formula based on “equalized valuation,” rather then upon assessed valuation. Equalized valuation has been carried forward as a basic component of newer formulae set forth by the Legislature from time to time to calculate the distribution of State school aid funds.

The equalization process is intended to provide stability in the total market value of a municipality over time. This is an important goal for the sake of stability, predictability, and fairness in municipal and school finance. It is intended to completely reflect changes in market value each year, and thus to bring the assessments in all municipalities to a common standard. On the other hand, it is constrained not to change “too much” by the averaging together of two years’ true values to prevent large fluctuations in municipal equalized values. This two year averaging is used in order to preserve stability in municipal and school finance.

THE SALES RATIO PROGRAM

The sales ratio program is based upon a comparison of the assessed values of parcels of real property which have been sold, and for which deeds have been recorded, with their sale values. It is assumed that the assessments on the properties sold will be representative of the assessment practice in the taxing district. Thus, if the assessment of the properties sold average 90 percent of the sale prices, the assumption is that all similar properties in the taxing district are being assessed at an average of 90 percent of their true value or market value.

DIVISION OF TAXATION RESPONSIBILITY

Responsibility for the sales ratio program rests with the Property Administration Section in the Division of Taxation. Procedures of sales data collection and analysis have been developed by that section, but the success of the process requires the cooperation of every county board of taxation and every local assessor. The results of the section’s work, in the form of the Table of Equalized Valuations, is certified by the Director of the Division of Taxation on October 1 of each year to the Commissioner of Education for State school aid purposes, and delivered to each county board of taxation for the purposes of apportioning the costs of county government and of school districts covering more than one taxing district. This calculation of equalized values is one of the most important tasks of the Division of Taxation. The results of the calculation have widespread ramifications for the fiscal condition of the municipalities and school districts in the State, and therefore (indirectly) the welfare of every resident of the State.

THE SAMPLE

The utility of any property equalization program, including the one used for State school aid, is contingent upon the extent to which the sample of sales-assessment ratios is representative of all property assessments within the taxing district. Although it is generally assumed that a large sample is preferable to a smaller sample, this is not necessarily true in all cases. The test concerns the randomness of selection in a manner to represent all areas of the taxing district and all characteristics of property within the tax roll of the taxing district. The implied appraisal of the sample requires information not presently available in any centralized tabulation of “usable sales.” One way to increase the randomness in the process of estimating market values is to use sales data from a period of time longer than one year. The equalization process currently in place does exactly this by averaging the estimated market values from both the current and previous year when calculating the equalization ratio. More precisely, the current system averages two year’s values each computed using one year’s worth of useable sales data.

INFLATION / DEFLATION

Either inflation or deflation assures trouble in the equalization process — lots of trouble. State government cannot hope to moderate the force of inflation that impact on the changes in the sale prices of property which sale prices determine the assessment to sale ratio that is used in the equalization process.

However, underlying the use of the assessment to sales ratio for equalization purposes has been a tacit belief that most real estate values will be largely stable from year to year. As a matter of course the State relies upon an equalization process which is based on this assumption. Most changes in value for equalization purposes are expected to be gradual rather than large or sudden.
CAUSES OF INCREASES IN PRICES OF REAL ESTATE

Many forces of demographic change, large stock market capital gain realizations, desire to live in the municipalities with the best school systems, trends in personal tastes for larger homes, an increase in real personal income, and so on, have been operating on real estate prices. All of these wants of people raise the demand for housing and for places to work and play. And, they are not making any more land on which to satisfy these wants. Therefore, the increase in the demand for space will continue to have a relatively larger influence on land prices. Also, the prospect of inflation leads some investors seeking protection from inflation to acquire real property. While inflation at the same time induces other owners to hold property when sale would have been the normal action, thus hyper inflating property sale prices. Historically, through innumerable inflations, the possession of land and buildings has preserved real value when money and may other assets have lost much of their worth. Our own recent history seems to confirm the principle. Within a locality the specific changes can diverge significantly. These specific changes can create wide swings in the price people are willing to pay for property and in particular land.

State government must learn to live, somehow, with an annual equalization process that conforms to a frequency of value changes that in the past were brushed aside because the amounts involved seemed too small to be troubled about.

Perhaps one way to stabilize the annual equalization process would be to double weight the previous years’ true value when the “Hyper Land Change Factor”is one. A factor of one means that the percent change in land assessed values statewide have increased at a rate of growth twice the rate of change in the State CPI in a particular year. During the period from 1971 to 1999, a period of 29 years, a factor of one occurred ten times in New Jersey. Remember, that 43% of the CPI index is comprised of housing. This periodic adjustment to the equalization process would serve to stabilize the total market value of municipalities in the State over time. This is an important goal for the stability, predictability, and fairness in municipal and school finance. It would remove the sudden increases in equalized values reflected in periods of hyper inflation as reflected in land prices and thus bring the annual equalized values in all municipalities to a more common stable standard. In preventing large fluctuations in municipal equalized values from year to year in this manner stability in municipal and school finance could be preserved. Perhaps many suburban and rural municipalities have their county tax apportionment costs increase rapidly when double digit land increases occur. Other municipalities may lose State school aid dollars because of becoming property rich in short order. Stability has a lot of friends in local public finance.

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