Want to prepay property taxes to beat federal tax overhaul? Here's what we've learned

Syracuse.com ^ | 22 Dec 17 | Michelle Breidenbach

[SkyPilot]

The people who collect taxes in New York are acting fast to help taxpayers try to get ahead of a pitfall for homeowners in the new federal tax overhaul.

The tax bill, which passed earlier this week, is confusing. Here's what we know:

The bill will no longer allow taxpayers to deduct more than $10,000 in state and local income and property taxes from their federal income taxes.

At the same time, it doubles the standard deduction to $12,000 for a single taxpayer and $24,000 for a family.

That means more people will no longer itemize their taxes.

But there is one strategy homeowners who itemize now can use to beat the bill.

If your county allows payment of 2018 property taxes at the end of 2017, you can pay now and take the deduction on your federal income taxes in the spring, according to many news sources.

Some tax collectors and other government officials are going out of their way over short-staffed holidays to make this happen.

But the news has also set off a storm of skeptics who wonder if the IRS will really allow it.

The bill passed earlier this week in Washington prohibited the deduction of prepaid state and local income taxes. But Congress was silent on the prepayment of property taxes, said Stephen Acquario, executive director of the New York State Association of Counties.

"Ultimately, it will be up to the IRS to determine if the prepayment of 2018 property taxes are deductible for the 2017 tax year," he said.

Many taxpayers have been prepaying county property taxes and taking the early federal deduction for years. One town tax collector said she keeps a list of people who prepay and gets the bills to them ASAP.

[Thank You Rush]

Thanks. I thought that might be what was meant but I read literally “local income” - local income tax would have made more sense.

[Lurker]

“Isn’t this a excellent reason to protest tax rates in these states?”

It is indeed. It’s also an excellent way to starve local Rat political machines.

L

[CurlyDave]

...Until last year I paid taxes and insurance myself.. 2 whole chunks that came hard. Everyone should know how much taxes they actually pay...

I have done it that way for 40 years.

IMHO we could cure the government overspending problem with an amendment that made tax withholding illegal. If everyone know how much their taxes really were, all political campaigns would revolve around government spending and tax reductions.

Now changing election day to about two weeks after tax day wouldn't hurt, but most folks could remember that one big check for the whole year...

[CurlyDave]

...What is LOCAL income?..

Think local TAXES, not local INCOME.

[SkyPilot]

It’s also an excellent way to starve local Rat political machines.

And the millions of conservatives and Republicans in NY, NJ, CA, MA, MN, and other places are the hostages who get tortured and shot in the process.

Nice.

There are 28 House GOP seats in NJ, NY, and CA alone. I think all of them are now in serious jeopardy, no matter how the individual member voted on the tax bill.

[Lurker]

“And the millions of conservatives and Republicans in NY, NJ, CA, MA, MN, and other places are the hostages who get tortured and shot in the process.”

Sucks to be them. Move and deprive them of House seats or get busy changing your local politicians.

L

[SkyPilot]

Move and deprive them of House seats or get busy changing your local politicians.

Yes, and I just decreed from on high that all inflated local pensions for cops and teachers be reduced.

Thanks. That was so easy.

For my next trick, I am going to decree that the news media cannot be biased, and that all of Hollywood is banned from hereafter from every making another lame comic book movie ever again.

[Rome2000]

Yes, I posted at thread about it and it was pulled by the mods.

I was accused of being an anti-semite.

[Lurker]

You’re either part of the solution or part of the problem.

You fall into the latter category.

Merry Christmas.

L

[blam]

Turmoil Grows Over Disparity In Rules For Prepayment Of Property Taxes - Story Developing - Wirepoints Original

[SkyPilot]

I'm not part of the problem by pointing out the truth. This bill raises the taxes on millions of middle class Americans. It is what it is.

But God is still in charge.

A very Merry Christmas to you and yours as well my friend.

[Night Hides Not]

Merry Christmas to you, too.

Perish the thought of losing a couple of drops of Merlot...I think I’ll switch to Riesling. Lol

[Alberta's Child]

I'm in one of those 28 House GOP seats. The good news is that I don't think anyone in my district is dumb enough to believe that electing a Democrat is going to make them any better off.

The irony here is that the people in these states who are getting the short end of the stick with this tax reform bill are the ones who have been targeted to get screwed by every Democrat tax scheme in my lifetime.

[willk]

So even if my property taxes are paid by impound account, I can go ahead and pay the remaining 2017 property taxes (which aren’t due until April 2018) by Dec 31?

[Svartalfiar]

What that graphic fails to include is the boost in the child tax credit. That same family of four would get $4000 in tax credits that the solo filer doesn't. Assuming a 20% tax rate, that's the same as an additional $20,000 in deductions. So unless it's a really rich family ineligible for the ctc, the LA Times is complete crap here.

[SkyPilot]

Several “ifs.” If your local government accepts them, and if you contact your mortgage company (or whomever is paying them except for you) and work it out.

[willk]

Thanks, but why would I have to contact my mortgage company?
Can’t I make the payment myself even if I have an impound account? I don’t think I have time for the mortgage company to make the payment.

[cherry]

financial experts have for yrs urged people to pay their next yr taxes early, if they needed extra deductibles...

the other strategy I can think of for next year...its too late this year....is to give as much as you possibly can to your 401k, etc...to diminish your AGI.

[SkyPilot]

Yes, you can, but you don't want them to make a payment on property taxes if you are going to make them separately. You will eventually get that money back from the state if they are double paid, but it can be a hassle.

Ask me how I know.

[willk]

Thanks. I’ll check with the mortgage company first. This will be great if it works out. I will save almost $1,000 for 2017 and be able to use the full $10,000 deduction in 2018.