Tax Bill's A Math Headache

Between this credit cards, mortgage, 401k's, 403(b)'s, etc..

I hope our dear school begin to teach a math that will really help folks out.

As I have yet been able to employ the years of studying calculus, algebra, trig or word problems.

Or perhaps, our Government, can try to employ methods that average citizens can understand.

"At this point the best way to calculate anticipated 2008 taxes is to multiply by two the third quarter amount billed, then add that figure to the taxes billed in 2008 for the first and second quarters (estimates as well). This total number can then be compared to the total billed in 2007 to determine the change in your taxes from 2007 to 2008."

THEY have ALL the figures they want YOU to do the calculation for. THEY(Montclair) should INCLUDE this estimate somewhere on the bill.

(note: the caps are not screams, just emphasis since I have no idea how to bold or do italics)

And, dare I ask, what are Bloomfield tax payers supposed to do with their 3rd qtr. estimated tax bills?!?!? (other than pay 'em?)

"And, dare I ask, what are Bloomfield tax payers supposed to do with their 3rd qtr. estimated tax bills?!?!? (other than pay 'em?)"

Read 'em and weep...

[Let me first state that I am explaining, not advocating for, the tax billing system. This is how the system works in GR, I think Bloomfield's is roughly the same. Montclair might be a bit different, but I think the same principles apply.]

Whether or not it is an estimated bill, the third quarter bills are always higher than the first and second quarter's bills because there is always a tax increase (again - I'm just explaining), and that increase applies to the whole year. Since the first two bills don't reflect the 2008 increase (because the amount of the increase hadn't been determined yet), the third and fourth quarter bills each include half of the increase (That's two quarter's worth each).

An example:
Let's say you got paid $400 in 2007, paid quarterly (your mom's right, you really can do better). In January, 2008 your boss says you are getting a raise effective for the entire year, but they won't know exactly how much it will be until July 1, 2008.

On January 1, 2008, you get $100 and
On April 1, 2008, you get $100

On July 1, your boss says: "Good news, you are getting a 5% increase for 2008", so

On July 1, 2008, you get $110 (that?s 5% x 2) and
On October 1, 2008, you get $110

Net-net, you got $420 (no jokes please) in 2008, that's 5% more than the $400 you got in 2007.

Unfortunately, for the last few years, the State has not been giving the Counties and the Municipalities the information they need to calculate the tax rate by July 1, so the towns issue "estimated" tax bills on July 1.

Using the same example:

On July 1, your boss says: "Corporate still hasn't given me the exact numbers, but you'll be getting an increase of around 6% for 2008", so:

On July 1, 2008, you get $112 (that?s 6% x 2)

On August 16, your boss says "sorry, it turns out you are only getting a 5% increase for 2008", so

On October 1, 2008, you get $108 (net-net $420).

Carl,
Thanks. It makes perfect sense in that context.

Carl is SO Cool!