IRS says taxpayers trying to use deduction that will be scaled back can prepay 2018 property tax...
Source: The Washington Post
IRS says taxpayers trying to use deduction that will be scaled back can prepay 2018 property taxes only under limited circumstances
By Washington Post Staff December 27 at 5:13 PM
Many Americans have rushed to prepay their 2018 property taxes and save on their federal taxes, hoping to take advantage of a tax deduction that will be scaled back in the new tax law passed by Republicans last week. The Internal Revenue Service confirmed Wednesday that taxpayers will be able to take advantage of the maneuver but only under limited circumstances.
The IRS said that taxpayers can claim an additional property tax deduction when paying their 2017 taxes if they pay the tax this year and if the local tax authority has notified homeowners prior to 2018 of how much they owe in property taxes, known as a tax assessment. State and local laws vary as to when this occurs.
For individuals who rushed to prepay their property taxes based on estimates about how much theyd owe, the decision could prove a frustration as it may be difficult to cancel those payments. Local tax officials in affected localities will now be forced to interpret the decision for their residents.
This is a developing story. It will be updated.
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Read more: https://www.washingtonpost.com/news/business/wp/2017/12/27/irs-says-taxpayers-trying-to-use-deduction-that-will-be-scaled-back-can-prepay-2018-property-taxes-only-under-limited-circumstances
Eliot Rosewater
(31,121 posts)this country loses it over you motherfuckers.
IronLionZion
(45,528 posts)assholes
elehhhhna
(32,076 posts)IronLionZion
(45,528 posts)Igel
(35,356 posts)I could have paid my taxes every two years. Every two years I'd have enough deductions to actually itemize and be able to pay less in taxes.
That's one tax avoidance strategy it's too late to pursue now.
Skittles
(153,193 posts)I thought they just made an allowance for it now
mopinko
(70,208 posts)and it is based on their usual first installment, which is set at 55% of the last year's total.
prolly a good rule of thumb to follow.
progree
(10,918 posts)in 2017.
Local officials can interpret the decision til the cows come home, but it won't affect what deductions the IRS allows. If they are talking about local officials allowing people to cancel those payments, then yes, they can do that, but they don't have to "interpret" any IRS decision in order to decide whether to allow people to cancel those payments..
jayfish
(10,039 posts)the deficit projections for 2018.
Gothmog
(145,554 posts)SunSeeker
(51,696 posts)We will be putting the check for our property taxes due Feb. 1. 2018 in the mail today, since we already have a return stub with an amount for that. The property tax year runs July to July here; for once I appreciate that quirky fact. And that will assure we stay within the $10,000 limit for property tax deductions in 2018 when we get the "2018-2019 Secured Property Tax Bill" this summer since we will only be deducting the payment due November 1 in 2018.
We will get hosed on the amounts due in 2019 through. Hopefully we flip the House in 2020 and that full deduction comes back.
4139
(1,893 posts)To the detriment of low and moderate income housing.
We all also should be cheering this and the lowering of the interest deduction!
No and, no ifs, or buts!
pnwmom
(108,994 posts)using local income, real estate, and sales taxes, and ALSO provide more Federal tax funds to the Federal government than they receive in Federal services -- with the balance going to poorer, mostly red states.
4139
(1,893 posts)Odd argument
pnwmom
(108,994 posts)then having that house with its big mortgage doesn't make you rich.
Unfortunately, real estate in urban areas is much more expensive -- and that's where most of the jobs are. And foreign buyers who pay all cash and think they're getting a bargain. But people in blue states are also paying more to the Federal government than they get back in services -- so they're helping to support the lower cost states.
4139
(1,893 posts)Only around DC, NYC and San Fran... maybe a couple others.
pnwmom
(108,994 posts)People with jobs in Seattle are competing to buy houses with foreign buyers who are paying all cash. What are Seattle employees supposed to do? Quit their jobs? They took the jobs and took the mortgages based on a tax system that has been in place for decades. And now they're going to be punished for it.
And people in many cities owe more than $10K in COMBINED income taxes, real estate taxes, and sales taxes. They just happen to live in blue states, which DT is determined to attack.
BeyondGeography
(39,379 posts)And everyone in those states will be affected because all public wealth will be defined down as a result. But as long as your little ox isnt being gored, no biggie eh?
SunSeeker
(51,696 posts)Until schools are 100% funded by the federal government, property taxes should be deductible. No ifs, ands or buts.
Hoyt
(54,770 posts)have the money available to do this ?
dragonlady
(3,577 posts)A spokeswoman for the Wisconsin Department of Revenue, Patricia Mayers, confirmed that the city officials are correct.
Gawenda said that the passage of the federal tax law so late in the year didn't leave time for state legislators to tweak Wisconsin law to adjust to these changes. His own office would have also needed two to four weeks to set up a different system for accepting early prepayments of property taxes, he said.
"It was done in a hurry without a lot of sharing of what was in it," Gawenda said of the federal law. "It's a shame that there wasn't any more time for planning."
Milwaukee Journal Sentinel
Rollo
(2,559 posts)However I've already paid 50% on my taxes, sending the tax man the payment already billed and due Feb.1. Usually I delay paying until April 10, the drop dead date, but in some circumstance it's a tax advantage to pay before the end of the year.
Without the next property assessment we can't know exactly how much tax is due, and I understand the local tax authority won't accept them anyway.
There is a limit to how much we can mitigate the tax con that Trump, Ryan, McConnell, and the GOP has inflicted upon middle class.
The best answer is to vote the bastards out of Congress and the White House.
SunSeeker
(51,696 posts)We will be putting the check for our property taxes due Feb. 1. 2018 in the mail today, since we already have a return stub with an amount for that. The property tax year runs July to July here; for once I appreciate that quirky fact. And that will assure we stay within the $10,000 limit for property tax deductions in 2018 when we get the "2018-2019 Secured Property Tax Bill"; we will only be deducting the payment due Nov. 1, 2018 as our property taxes paid in 2018. That is the best answer right now.
But of course, the best answer ultimately is to vote the bastards out of Congress and the White House.
Rollo
(2,559 posts)I bought long enough ago that my property taxes, even with annual 2% assessment increases, is still well below $10,000. I prepaid the second installment primarily because I don't expect to be able to itemize going forward due to a combination of low property tax and waning mortgage interest deductions. This way I can guarantee some property tax deduction for the 2017 tax year.. and it will probably be the last year I can itemize.
SunSeeker
(51,696 posts)Prop. 13 should not apply to businesses or any artificial entity that can live forever. But don't get me started on Prop. 13.
Rollo
(2,559 posts)To wit, many businesses have shirked their fair share of business property taxes by creating (or partnering with) real estate firms that hold the business's buildings in perpetuity, which the businesses lease back, thus allowing the business to move and/or expand/contract while retaining an effective low tax assessment that they could not have otherwise achieved if they owned the real estate they operate from.
brooklynite
(94,727 posts)(my wife is a tex attorney and has studied this)
Your City/County tax office MUST issue an assessment for the taxes you're prepaying.
Maeve
(42,288 posts)so I paid them tonight--that works, as I understand it. Paid three weeks earlier than needed, but deductible.
brooklynite
(94,727 posts)truthisfreedom
(23,155 posts)Was overwhelmed with people doing this today. 25 people.
SunSeeker
(51,696 posts)He told them they just need to postmark the property tax payment check in 2017.
csziggy
(34,137 posts)If you pay in November, you save a significant percentage. Each month, the amount due goes up until it hits the total owed.
We always pay in November so our 2018 property taxes are already paid - though my taxes are far lower than the $10,000 limit. We saved several hundred dollars by paying right away.