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fjpuentes1974
Level 2

Hola For California Property taxes, are taxes considered on cash basis for income tax ? if I prepay next years installment, can I included it in the income tax when paid?

Property taxes California, cash basis?
4 Replies
SweetieJean
Level 15

Hola For California Property taxes, are taxes considered on cash basis for income tax ? if I prepay next years installment, can I included it in the income tax when paid?

You are asking from TT Live.  Please contact your Live rep.

Critter-3
Level 15

Hola For California Property taxes, are taxes considered on cash basis for income tax ? if I prepay next years installment, can I included it in the income tax when paid?

You cannot deduct taxes that have not been billed yet but if the 2023 tax bill comes out in 2022 and you pay the 2023 taxes in 2022 then they are deductible on the 2022 tax return.  And if you paid the 2022 tax bill in 2022 you would have 2 tax bills to report on the 2022 return.   But you cannot simply overpay the RE taxes just to force a deduction before the bill has been issued. 

VolvoGirl
Level 15

Hola For California Property taxes, are taxes considered on cash basis for income tax ? if I prepay next years installment, can I included it in the income tax when paid?

I'm in California too.   When I get the bill I pay both parts (Nov & April).   A long time ago when I could itemize deductions I would alternate and pay 3 payments (April, Nov & April)  in one  year and then the next year have less to pay and deduct.  So I would get a bigger deduction every other year.  

Critter-3
Level 15

Hola For California Property taxes, are taxes considered on cash basis for income tax ? if I prepay next years installment, can I included it in the income tax when paid?

That is still allowed and a valid tax planning tool  HOWEVER  since 2018 the SALT act has limited the RE & state taxes on the sch A to a max of $10K so this method may no longer be advantageous.  

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