How to Calculate Impound Tax

Impounds are collected for future tax bills.

A financial lender sets up a tax impound account for a borrower, who then makes regular payments to the account. Periodic tax payments are made from the account, usually for tax purposes.

Things You'll Need

• Impound tax schedule
• Financial lender (if applicable)

Instructions

1. Talk with your lender about the specifics of your situation. Examine your annual property tax bill to find out your payment and estimate average annual increases in the levy.

2. Work with your lender to set up a schedule of payments that will be made on your behalf for tax allotments. For example, if your property tax payment is $5,000 per year, you might set up a schedule with your lender where you could make a monthly payment of around $417 per month to pay the property tax off in installments.

3. Make sure that it is clear who will be making the payments, yourself or your lender. Even though the lender is holding the money for you, the lender might not be the one making the payments. Clarify the dates when the payments will be made.

References

• Assetman
• Kent County Treasurer