Prepaying Your Property Taxes? I.R.S. Cautions It Might Not Pay Off
- 6 years ago
Prepaying Your Property Taxes? I.R.S. Cautions It Might Not Pay Off
In those states, tax lawyers said, homeowners who prepay taxes will almost certainly be able to deduct their taxes under the 2017 rules.
Some states have encouraged residents to try to skirt the new cap on state and local tax deductions.
The tax bill that President Trump signed into law last week sharply limited the itemized deductions for state
and local taxes while raising the standard deduction for individuals and couples.
In Fairfax, Va., hundreds of people lined up to prepay taxes on Tuesday, according to local media reports,
and communities in New York, New Jersey and other states have likewise reported a rush of prepayments.
The Internal Revenue Service has a message for the homeowners rushing to prepay their
property taxes before new rules take effect on New Year’s Day: Not so fast.
To qualify for the deduction, property taxes not only need to be paid in 2017, they must also be assessed in 2017 — meaning
that homeowners who prepaid their taxes based on estimated assessments, or who tried to pay several years’ worth of taxes at once, will probably be out of luck.
In those states, tax lawyers said, homeowners who prepay taxes will almost certainly be able to deduct their taxes under the 2017 rules.
Some states have encouraged residents to try to skirt the new cap on state and local tax deductions.
The tax bill that President Trump signed into law last week sharply limited the itemized deductions for state
and local taxes while raising the standard deduction for individuals and couples.
In Fairfax, Va., hundreds of people lined up to prepay taxes on Tuesday, according to local media reports,
and communities in New York, New Jersey and other states have likewise reported a rush of prepayments.
The Internal Revenue Service has a message for the homeowners rushing to prepay their
property taxes before new rules take effect on New Year’s Day: Not so fast.
To qualify for the deduction, property taxes not only need to be paid in 2017, they must also be assessed in 2017 — meaning
that homeowners who prepaid their taxes based on estimated assessments, or who tried to pay several years’ worth of taxes at once, will probably be out of luck.