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Created:Wednesday, December 27, 2017
Members: Wednesday, December 27, 2017 at 11:07 eastern (1472 days ago)
Public: Wednesday, December 27, 2017 at 11:07 eastern
Expiration:unknown
This is an informational posting or a note regarding an existing deal
Heat level:N/A
Countries:available in USA
Details:Some People Can Prepay Property Taxes Now to Save Hundreds or Thousands of Dollars in 2018:
Conventional wisdom has long held that it's better to wait to pay taxes when they are due, but that is not necessarily the best plan for some people today.

Some homeowners may see their taxes rise in 2018, but could defer some increases by prepaying their property taxes before the end of this month.

Here's what's happening:
  • Effective January 1, 2018, if your state and local taxes total more than $10,000 in the year, you will effectively be double-taxed on the amount paid above $10,000 as if it were income rather than written-off as taxes paid.
  • For middle-class Americans who own their home, this could mean a tax hike, possibly significant depending on their home's value and amount the homeowner pays in state/local taxes.
Information is still emerging and unclear because details of the Republican tax plan only became public in the last week, leaving tax accountants short time to review and understand it.

One thing for sure is the amount of itemized deductions, especially property taxes, will be capped starting January 1. This is why people in some states are scrambling to pay property taxes early while they can still get full credit.

Recent articles published on Yahoo finance, NPR.org, NJ.com, and The L.A. Times all have the following advice for homeowners:
  • If someone's household income was less than the amount to trigger AMT on their federal tax return (married couple earning under $83,800/yr), and
  • Someone owns their home in any US state, especially in a state with greater than 1% property taxes or higher than 7.5% state income tax, and
  • Has enough cash now to prepay property taxes that are owed in 2018, and
  • Their local government already issued a property tax bill due in 2018, and
  • Think their household will owe more than $10,000/year in total state, local, plus property taxes in all of 2018.
Someone who meets all the above criteria might be able to defer their tax increase until 2019, saving hundreds or thousands of dollars in 2018 by prepaying their property taxes before December 31.

Your state's tax offices and local news organizations may provide details specific for your area. For example, towns in Maryland, the governor of New Jersey, and states of New York & California have set up ways to allow homeowners to pre-pay their property taxes before the end of the year. In Illinois, for example, 47,000 Cook County residents already paid their property taxes early compared to just 1,700 people last year.

Note that this ploy may not actually work, since the law's language is confusing a lot of municipalities. Some towns rushed to set up prepayments, and stopped when they learned their payment receipt structure would not qualify residents to apply the prepayment on their 2017 taxes.

Mortgage holders will need to notify their bank before making property tax prepayments.

There are other ways to get tax credits now before they end. As a Mercury News article (a California newspaper) and a New York Times article say, some people may consider donating more to charity by Saturday, December 30 to get tax benefits before the new law lowers the charity write-off benefits on January 1.
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