Taxes are part of life, but understanding where your money goes can be confusing. This article is meant to give a very simple explanation of how income tax and property tax work in Lorain. While there are many details and exceptions, this will provide a general idea of what each tax is and where the money goes.
Income Tax: What It Is and Where It Goes
What It’s Taxing:
- A percentage of the money you earn from work, investments, or other sources.
Who Pays It:
- Anyone who earns taxable income.
Who Collects It:
- Federal Government – Used for national defense, Social Security, Medicare, and federal programs.
- State of Ohio – Funds education, roads, state parks, and other services.
- City of Lorain – The city collects a flat 2.5% income tax on earned income to fund local services like police, fire, roads, and parks. Lorain has it’s own Income Tax Department to collect and process this tax.
How It’s Calculated:
- Federal and State Income Tax – Based on how much you earn, with different tax brackets.
- Lorain’s Income Tax – A flat 2.5% tax on earned income.
Where the Money Goes:
- Federal Taxes – National programs (military, Social Security, federal agencies).
- State Taxes – Schools, roads, state agencies, state parks.
- Local Taxes – Lorain police, fire, road maintenance, parks, and city operations.
Property Tax: Owning a Piece of Lorain
What It’s Taxing:
- The value of your land and buildings.
Who Pays It:
- Anyone who owns property in Lorain.
Who Collects It:
- Lorain County Auditor – Determines the property’s value and calculates taxes.
- Lorain County Treasurer – Collects the property taxes.
Where Your Property Taxes Go:
- Lorain City Schools – Usually the largest portion, paying for teachers, school buildings, and educational programs.
- City of Lorain – Helps fund police, fire, roads, parks, and city services.
- Lorain County – Pays for the county sheriff, courts, and other county services.
- Townships (if applicable) – Supports township services for those in the township.
- Other Levies – May include funding for the library, Metroparks, or other special projects.
How It’s Calculated:
- Assessed Value – The Lorain County Auditor assesses your property’s value (usually lower than market value).
- Tax Rate (Millage) – Each taxing authority (schools, city, county) sets a rate, called millage.
- Example Calculation:
- If your property’s assessed value is $100,000 and the tax rate is 20 mills, you’d calculate:
- ($100,000 ÷ 1,000) × 20 = $2,000 in annual property tax
- If your property’s assessed value is $100,000 and the tax rate is 20 mills, you’d calculate:
Key Differences Between Income Tax and Property Tax
What It’s Taxing:
- Income Tax – Money you earn from work or investments.
- Property Tax – The value of land and buildings you own.
Who Pays It:
- Income Tax – Anyone with taxable income.
- Property Tax – Only property owners.
Who Collects It:
- Income Tax – Federal, state, and local governments.
- Property Tax – Local governments, including schools, city, county, and townships.
How It’s Calculated:
- Income Tax – Based on your earnings, with different tax rates.
- Property Tax – Based on your property’s assessed value and millage rate.
Where the Money Goes:
- Income Tax – Funds federal programs, state services, and local government operations.
- Property Tax – Primarily funds schools, plus city services, police, fire, and local government operations.
Staying Informed
Taxes may not be fun, but knowing where your money goes helps you stay informed about your community.
- Lorain Income Tax Questions? Contact Lorain Income Tax Department.
- Property Tax Questions? Contact the Lorain County Auditor (for assessments) or the Lorain County Treasurer (for payments).
- State Income Tax Questions? Contact the Ohio Department of Revenue.
- Federal Income Tax Questions? Contact the IRS.
Want to have a say in where your tax dollars go? Attend local government meetings, vote on tax levies, and stay engaged with your community!
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