Anybody prepaying their property taxes
- Thread starter Obliviax
- Start date
Going to do it today for the quarter of Feb 1. May do another the other quarter for May 1 also. I can do it online and via credit card, and it comes back within minutes. Worth it.
sucks, but no can do in PA....hard to believe can't give $ away.....
Same. Was told by my accountant you can only pay the portion that was billed last year ...? We get our 4 quarterly coupons mailed to us in July so we can only pay 2 quarters. Any one else hear the same thing ?
Yes.... my understanding is that you can't prepay 2018 taxes, you can prepay 2017 payments scheduled for 2018 if your locality will allow it.
Paid 4th qtr estimated income PA income taxes and 2qtrly payments on my Jersey shore house. All done today.
I guess the answer is not so black and white as it looks there is some confusing language in the tax bill....https://www.bloomberg.com/news/arti...cting-dates-stir-debate-on-early-tax-payments
Last edited:
Montgomery county Maryland will allow full year but it's based on 2017 rates as they don't have amounts calculated for 2018 yet. I've heard of people being asked how may years do you want to pay? in Fairfax county VA. They also allow prepayment of their auto tax. Heard a guy wrote a check for 45K for a few years.
New tax law limits the total federal deduction of state, local and property taxes to $10K in 2018. If you are going over that amount in 2018, prepaying in 2017 allows deduction from federal taxes in 2017 where there isn't an upper limit.
Just overhead the same at the Fairfax County VA tax office. Prepaid just one year's worth of real estate tax and also the personal property (vehicle) tax.
Curious, for you guys who are looking at pre-pay, approximately how much do you pay in property taxes annually? By comparison, I live in central PA and pay approximately 5K annually and that covers, state, local, county and school. If someone pays more than 10K per year you must be getting unbelievable services from your state and local governemnts!
The uncertainty concerns state and local income tax. Real estate and personal property taxes seems fairly clear.
Worse case scenario is that you prepay taxes you otherwise would have to pay next year and you lose the (after tax) interest on the prepayments.
Let's not get started down that road, but I pay a hell of a lot more than you pay.
I believe that the 10k limitation includes state income and property taxes.
several reasons:
- I had a big earning year in 2017 and will make less in 2018 so it makes sense to deduct expenses in 2017 rather than 2018.
- Tax rate for married and head of household in 2017 was 28% at $100k. In 2018 it will be 22%. So deducting it off of your taxable income against 2017 is better than 2018 (6% Better). So a $10,000 deduction is 6% better if taken in 2017 than 2018 ($600 bottom line).
- If you pay $6,000 in property, $10,000 in state and $2,000 in local, you are at $18,000. If capped at $10,000, you lose $8,000 in deductions. At 28%, that is a loss of $2,800 to the bottom line.
- If you are really big earner, the top rate in 2017 is almost 40%. In 2018 it is 37%. This makes the deduction almost 3% more valuable in 2017 than in 2018. And, as stated before, 2018 will be capped at $10,000.
A lot depends on where you live. My home, if in manhattan or CA, would be worth several million (yours too, probably). I know people that have $1,000,000 mortgages and pay $50,000/year in property taxes.
Here is a nice house not too far from me, $850,000. Annual property taxes are just under $24,000/year.
Last edited:
Local property taxes here in Rochester area will supposedly be ready and available on the county website on Fri. the 29th. Giving you one day to write the check and send it in or deliver directly to the clerks office. I plan on sending it in on Fri.
Seriously. I’d release my taxes for you all to see, but I’m currently under audit.
Typically, roughly 75% of your property tax goes to school district. Here in the SE, the taxes are what I would consider to be higher in some districts, quite literally to exclude those with less. I think it is a way to generate a private school mentality without actually having to pay a private school tuition. (Lower Merion would be a typical example). Then again, these “richies” with two houses, have nothing to complain about! Lol!!! Hey, if you are being taxed, that means you have it, that is the way I always look at it.
I am by no means rich but I live in a high tax state where housing is ridiculously expensive.
Not joking here ... between property taxes, state taxes and mortgage interest I typically deduct upwards of 70K. Again not joking. I have two kids in college too.
I heard someone in Fairfax County paid 3 yrs in advance. Don't persons doing this have property tax in excess of $10k annually. I can't imagine that!
My county taxes are due in January and can be prepaid. My school taxes are due in September and cannot be prepaid.
I have no idea how the IRS is intending to manage prepaid state income taxes. In many states you have to complete the federal return before you can complete the state return. You deduct state income taxes "paid" during that year. If it turns out that you overpaid you have to report the refund as income the following year, but only if you itemize. Maybe they'll say you haved to claim the overpayment as income in 2018 even if you're now claiming the standard deduction.
From the IRS eMail I subscribe to:
Issue Number: **SPECIAL EDITION**
IRS Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017
The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.
The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.
The following examples illustrate these points.
Example 1: Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018. On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a deduction for this prepayment on the taxpayer’s 2017 return.
Example 2: County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017 – June 30, 2018. County B intends to make the usual assessment in July 2018 for the period July 1, 2018 – June 30, 2019. However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018.
The IRS reminds taxpayers that a number of provisions remain available this week that could affect 2017 tax bills. Time remains to make charitable donations. See IR-17-191 for more information. The deadline to make contributions for individual retirement accounts - which can be used by some taxpayers on 2017 tax returns - is the April 2018 tax deadline.
IRS.gov has more information on these and other provisions to help taxpayers prepare for the upcoming filing season.
Prudent lifestyle, I guess. Never had strong desire to move up into bigger homes. Given I'm retired, I'm thankful for less than $10k tax.
Small homes in any decent neighborhood will still be greater than that.
Part of the issue is what else they throw in to the taxes.
When my parents built a house in 1977 the property taxes were $900 a year. When my mom sold it in 2003 the taxes were $13000 per year.
A large party of it was due to funding other areas that could not generate the taxes.
Lucky to live in northeast rural Iowa ..... yearly taxes $1200.00 
My property taxes alone in Ohio were $12K. That didn’t include my state and 3 separate city income taxes I had to pay (2 of the 3 city income taxes were additive). Now in Florida my real estate taxes are slightly below $5K for a slightly greater appraised home value than in Ohio and I pay no state or local taxes. So my overall tax burden is significantly lower than it was in Ohio. Therefore I don’t have to worry about prepaying any taxes.
I didn’t move to Florida to avoid taxes but instead for the climate and to be close to many relatives including my daughter.
I didn’t move to Florida to avoid taxes but instead for the climate and to be close to many relatives including my daughter.
Yep, good tax advise. Paying Q1 and Q2 tomorrow. Hoping that I'll be able to pay into Q3 and Q4 also. If anyone who can fit it into their cash flow, the return on your tax return will be much, much higher than you'll get keeping the money in the bank.
