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New Member
posted Jan 1, 2020 3:38:21 PM

H&R Block recommended bundling yearly property taxes to receive max benefits on return. Only claim the property taxes every other year. Good policy?

0 3 1067
3 Replies
Level 15
Jan 1, 2020 3:51:07 PM

Sure it can be.  I used to do that.  Mine are due Nov & April.  So I would pa in April (for the 2nd half) but in Nov pay both halves So I could deduct 3 payments.  But that might not work out anymore since the Standard Deduction is a lot higher and more people will be switching to the Standard Deduction.

 

And there is a max 10,000 limit (5,000 MFS) of property tax and state taxes "SALT".  SALT is State And Local Tax.  Which includes property tax, any state tax paid like for last year’s return and includes any state withholding from your W2s and any 1099s you have. And any taxes in W2 box 14 and 19 like SDI or VDI. You can only deduct up to 10,000 (5,000 MFS) for SALT State and Local Taxes.

Not applicable
Jan 1, 2020 5:33:22 PM

because SALT (state and local income taxes) deduction is  limited to $10,000 ($5,000 if married filing separately) it really depends on whether you have other taxes such as state income taxes and whether you have enough in itemized deductions to make itemized worthwhile.   Another trap could be the alternative minimum tax which can negate or reduce the benefit of the SALT deduction.   H&R may not have given the whole story about bundling real estate taxes.   Under the tax laws for those taxes to be deductible it must both be paid an assessed.  Prepayments generally  can be deducted in the year paid if the taxpayer is on the cash basis and the taxing authorities do not treat it as a deposit.  some jurisdictions,like where i live, limit the prepayment to 1/2 the prior year taxes.  pay more and the entire prepayment is rejected. 

Level 15
Jan 1, 2020 5:45:25 PM

Oh I was going to post the Standard Deduction amounts

 

For 2019 the standard deduction amounts are:

Single 12,200 + 1,650 for 65 and over or blind

HOH 18,350 + 1,650 for 65 and over or blind

Joint 24,400+ 1,300 for each 65 and over or blind

Married filing Separate 12,200 + 1,300 for 65 and over or blind