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charlesslex
New Member

I am trying to determine if I should prepay part or all of my 2018 property taxes today. What should I be looking at?

 
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Opus 17
Level 15

I am trying to determine if I should prepay part or all of my 2018 property taxes today. What should I be looking at?

If your itemized deductions this year (or last year) are more than last year's standard deduction but less than the new standard deduction, then paying the taxes now will be beneficial.  Single standard deduction is going from $6300 to $12,000; married filing jointly standard deduction is going from $12,600 to $24,000.

Or, if the combination of your state and local taxes, real property taxes and personal property taxes (lines 6+7+8) is more than $10,000, you will benefit from paying property taxes early.

Be aware that you can only deduct property taxes if they have already been assessed.  If the local government has not issued an assessment, they have no legal authority to accept a payment so you can't deduct the payment even if you make it.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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4 Replies
Opus 17
Level 15

I am trying to determine if I should prepay part or all of my 2018 property taxes today. What should I be looking at?

If your itemized deductions this year (or last year) are more than last year's standard deduction but less than the new standard deduction, then paying the taxes now will be beneficial.  Single standard deduction is going from $6300 to $12,000; married filing jointly standard deduction is going from $12,600 to $24,000.

Or, if the combination of your state and local taxes, real property taxes and personal property taxes (lines 6+7+8) is more than $10,000, you will benefit from paying property taxes early.

Be aware that you can only deduct property taxes if they have already been assessed.  If the local government has not issued an assessment, they have no legal authority to accept a payment so you can't deduct the payment even if you make it.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
fanfare
Level 15

I am trying to determine if I should prepay part or all of my 2018 property taxes today. What should I be looking at?

I heard Govs of NJ and NY are issuing executive orders to permit full or partial prepayment for 2018.
Opus 17
Level 15

I am trying to determine if I should prepay part or all of my 2018 property taxes today. What should I be looking at?

No.  

For New York, the governor issued an executive order allowing counties to issue their 2018 assessments early, on December 29.  Therefore, county and town taxes may be pre-paid on December 29 ONLY (or the 30th and 31st if the county office is open or they have a payment web site.)  School taxes in New York are assessed on July 1 of the year.  If you have an unpaid balance from July 1, 2017 you can of course pay it by 12/31/17.  Some cities bill their school tax in 4 installments, you can pre-pay the January and March installment since the assessment was already issued.  But, since the school taxes for 2018 will not be assessed until July, they can't be pre-paid.  (And, not all counties are assessing their county tax on 12/29/17.  Check your specific county.)

I don't know what they did in New Jersey.  However, no state law or state executive action can override Federal law.  The IRS interpretation of federal law -- which will stand until someone sues them over an audit --  is that the tax must be assessed in 2017 and paid in 2017.  You can't pre-pay a random amount to the taxing authority if they haven't issued an assessment.
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
charlesslex
New Member

I am trying to determine if I should prepay part or all of my 2018 property taxes today. What should I be looking at?

Thanks to all for the responses. Very helpful.

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