Posted on 12/24/2017 4:21:04 AM PST by SkyPilot
A very Merry Christmas to you and to everyone.
Agreed. That's why I wrote on my original post that all it will take is a statement of clarification by the IRS - and all the pre-pay efforts will be for naught.
In fact, that is what I am guess the IRS will in fact do. The law wrote that you cannot pre-pay state and local tax. I think that in the rush to ram the bill through, they simply forgot to add the language about property taxes. So we know the spirit and intent of Congress (and of course the IRS) is to prevent a loss of tax revenue with the new bill.
Congress won't even have to act or change the law. All the IRS has to do is "clarify" it.
In Georgia, property taxes that high would be a mansion.
In CT, NY, NJ, or other places - it can be a 2,000 sq ft average house of a solidly middle class family.
Thanks for posting the comparative table between the old and new tax law.
While most people will pay less Federal tax, the changes are not as fabulous as some reporters write.
That specific situation is barred.
Since this new law isn’t in force until Jan 1, 2018, anything you prepay in 2017 should not be a problem. I don’t see how the new law can control what you do in 2017.
I used to pay all my own property taxes & I paid the property taxes on the house my Dad lived in. He was earning $250 a month from Soc Sec, and his annual taxes on a small house in Wisconsin were around $2000 a year. Obviously, he could not afford to pay those taxes himself.
I used to pay ALL MY property taxes AND his property taxes doing 1 1/2 years in one year—prepaying just as they are discussing here. I would have to pay 1/2 year in one year, but with payments due in time frames such as August & January or December & April, Sometimes I could afford to pay all of the 2 bills all in one year. Or I could pay a much larger portion in one year & get a real nice refund. It worked out mathematically, since I was single & didn’t get many other tax breaks. YOU would have to make sure that your payment was received & acknowledged in 2017. You cannot just write a check dated 2017 that they do not receive until 2018, IMO.
Dad wasn’t worried about his ability to pay the taxes & he could relax over the issue. I just had to ask the town clerk/treasurer to send me a copy of his tax bill so I could may it for him. She complied without a hitch.
It all would depend on when you get the bills & how the payments are structured. I currently live where they ask for 4 payments—August-Oct-Jan-April. I paid all of the bill in August & there were no problems. Jest a cheery person t the county treasurer’s office.
Are you asking about IMPOUND accounts or are you currently in an escrow?
IF you pay your mortgage—Principal, Interest, Taxes, Insurance P I T I-—all in one payment to the lender, you may not be able to move any payments forward.
However, a call to your lender could clear this up.
The key to that rev ruling is the tax year. A reasonable estimate of 2017 taxes would not include a payment against taxes billed and due in 2018. Only taxes due in 2017.
A second issue is accounting methods. Prepaying a tax when you did not prepay the tax in prior years is an accounting change. Such a change requires advance approval.
“Irs already ruled Rev. Rul. 71-190, 1971-1 ..only a good faith estimate of 2017 tax is deductible in 2017.”
Exactly. And I don’t even know how one does a good-faith estimate of 2018 taxes, when the rates aren’t even determined until 6 months from now (at least in Texas)...and a lot of factors go into those rates, plus you have home assessments, which aren’t finalized until summer.
Perhaps if those assholes in the Northeast spent just a bit of the past 2 years trying to hold their local politicians accountable, rather than whining about Trump - they wouldn’t be in as much of a bind.
Right. It’s an overly simplified example of what people in these high-tax states are looking at. This new tax code basically incentivizes us to live as tenants and manage our own properties as landlords.
10000 includes income tax. So a family that haves 100k in income could easily have 5k in property tax and 5k in income tax.
Dude, dial it back a bit.
Millions of people in those states voted for Trump, are conservative, have families, run businesses, struggle to pay for college, etc.
Don't cast aspersions on people with so wide a net.
Old article - the child tax credit increase covered the loss of the exemptions for kids...not to mention the lower tax rates.
Probably best to stick to analysis of what the current law is, not what it might have been, from an article 3 months old, back when they could only speculate.
Until last year I paid taxes and insurance myself.. 2 whole chunks that came hard. Everyone should know how much taxes they actually pay.
After refi, taxes and insurance are included in monthly house payments.
2 of my grandkids go to Christian schools and it’s expensive to go that route.. but a better education... but parents still pay taxes for public schools. We pay taxes for services also but if you need one, they charge again.
I did exactly that for years, when I was paying my own property taxes & the property taxes on Dad’s house, which I co-owned.
“Dude, dial it back a bit.”
I know, plenty of good FReepers stuck up there.
...but you know the type I’m referring to also - the ones in the $700k suburban houses, DESPISE Republicans, keep voting Democrat - and then cannot figure out why nothing gets better and their taxes keep going up. And they badly outnumber us, at least in those areas.
Too many confusing tax stories my head spins every time I read a new tax article, especially being in a high-tax state, NJ. I’m just going to see what’s what when I file, which leads me to this one question: is this effective this filing, by THIS April 15 or for next filing?
insurance raises payments with one claim?”””
MY vehicle insurance has gone up considerably.
The Nevada legislature gave driver’s licenses to illegals 2 years ago & my insurance has climbed steadily since then.
The last accident I had was Oct of 1966-——last ticket more than 14 years ago—for seat belt.
I expect that my coming bill for MY property insurance will be much higher due to all the damages from all the hurricanes. ALL insurance companies pay into those damage claims & all of us help to keep everything afloat. ALL insurance companies ‘underwrite’ other insurance companies.
I have also been wondering about this. The House version eliminated the senior/blind tax break, but the Senate version didn’t. So it appears that the Senate version won out, at least on this point.
Damage from hurricane... I got a $12,000 new roof for my deductible ($1,000) and now I guess I’ll pay for it in higher premiums.
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