Should we pay full FY 2018 real estate tax bill that has been assessed in calendar year 2017? Real Estate Tax is $ 5,000 and our state tax is $ 7,500.

Forum|Forum|7 years ago
June 5, 2019
5 replies
13 views

Just to follow up we're married filing joint - paid the second half of FY 2017 taxes of $ 2,500 and first half of fy 2018 at $ 2,500 so we have $ 2,500 we can pay early 12 29 17 to use when we itemize 2017 taxes. Next year the standard deduction will be $ 24,000 and we wouldn't itemize then - just take the standard deduction. We also have mortgage interest and charitable deductions that will total about $ 17,500 this year plus the early payment of the $ 2,500 for balance of FY 2018 taxes. Paying early seems to make sense for us, correct?

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Best answer by Zbucklyo

The fact that you are mentioning "we" seems to indicate you are filing as married filing jointly. If so, and you have no other itemized deductions (most likely mortgage interest), you would be just at the threshold for which itemizing would pay off (unless you already have paid real estate taxes for 2017, and you are looking to double up). Without further information, this looks like it might be worthwhile to you, since the standard deduction next year for an MFJ return will be $24,000, up from $12,700 in 2017).

skippersAuthor

Level 2

We've paid second half of FY 2017 taxes of $ 2,500 and first half of FY 2018 taxes, both in CY 2017. Total imtemized last year was around $ 17K. Yup we're married filing joint. So looks like std ded in CY 2018 of $ 24K and pay balance of FY 2018 taxes now will put us with added $ 2,500 for CY 2017 is best bet. Yes or no?

Zbucklyo

Level 8

Unless you are subject to AMT, in which case the prepayment will not have an impact. Also, read this IRS advisory about prepaying:

<a rel="nofollow" target="_blank" href="https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-assessed-and-paid-in-2017">https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-assessed-and-paid-in-2017</a>

ZbucklyoAnswer

Level 8

SweetieJean

Alumni - Champ

https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-a...

Watch out for AMT.

skippersAuthor

Level 2

AMT not an issue for us - just wondering if we're limited in CY 2018 return. It appears that we'd max out our state and local tax deduction at $ 10,000 and prepaying in CY 2017 will help as they'd be fully deductible. The taxes meet the assessment threshold required to be deductible for this year.