Pay your 2017 Property Taxes and Estimated State Taxes NOW!

[NeedChapmans]

I'm not looking to make this political at all ... so please avoid doing so if you can. Just a touch of advice.

Tomorrow, it's very likely that Congress will pass a tax reform package that will effect most everyone (in either a positive or negative way). One of the provisions of the tax bill is that the maximum deduction anyone can take from the total of their state and local tax payments is $10,000. So for example if you live in NY and you pay $9,000 in property tax and $6,000 in state taxes, the most you can claim as an itemized deduction is $10,000 (previously, it was uncapped).

So, in 2018, the $10,000 limit is likely to go in effect. This means that if you wait to make an estimated tax payment until January 15th and/or your mortgage company / bank does not pay your property taxes until 2018, you might lose out on the ability to deduct these two payments in a future tax return. Best to pay them now, and know you can still itemize everything in 2017.

If you're a tax filer that does not itemize and always takes the standard deduction, then this message is of no concern. If you itemize and will still itemize in 2018 with the standard deduction for couples to be ~$24,000 ... take advantage of an early tax payment today so you can claim the full itemized deduction.

[TheHeel]

Originally Posted by NeedChapmans

I'm not looking to make this political at all ... so please avoid doing so if you can. Just a touch of advice.

Tomorrow, it's very likely that Congress will pass a tax reform package that will effect most everyone (in either a positive or negative way). One of the provisions of the tax bill is that the maximum deduction anyone can take from the total of their state and local tax payments is $10,000. So for example if you live in NY and you pay $9,000 in property tax and $6,000 in state taxes, the most you can claim as an itemized deduction is $10,000 (previously, it was uncapped).

So, in 2018, the $10,000 limit is likely to go in effect. This means that if you wait to make an estimated tax payment until January 15th and/or your mortgage company / bank does not pay your property taxes until 2018, you might lose out on the ability to deduct these two payments in a future tax return. Best to pay them now, and know you can still itemize everything in 2017.

If you're a tax filer that does not itemize and always takes the standard deduction, then this message is of no concern. If you itemize and will still itemize in 2018 with the standard deduction for couples to be ~$24,000 ... take advantage of an early tax payment today so you can claim the full itemized deduction.

Thank you. That’s a great idea. Now, to pay next month’s mortgage

[hairysasquatch]

Now as in NOW!!! or Now as in before 12/31?

[TheHeel]

Originally Posted by hairysasquatch

Now as in NOW!!! or Now as in before 12/31?

before 12/31

[NeedChapmans]

Originally Posted by hairysasquatch

Now as in NOW!!! or Now as in before 12/31?

12/31.

So long as your payments are made this calendar year, you can include them as part of your 2017 tax year return.

[DotVaDa]

For people that have mortgages, your property taxes are more than likely escrowed and it would be beneficial to call them and make sure they pay by 12/31 as OP mentioned.

If you pay any type of Home Owners Insurance, or HOA I would check with an Acct and see if there is any benefit to prepay for ‘18 if you happen to have the funds.


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[HoustonCPA]

Originally Posted by DotVaDa

For people that have mortgages, your property taxes are more than likely escrowed and it would be beneficial to call them and make sure they pay by 12/31 as OP mentioned.

If you pay any type of Home Owners Insurance, or HOA I would check with an Acct and see if there is any benefit to prepay for ‘18 if you happen to have the funds.


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HOA dues are never deductible/"itemizable" when it comes to personal income taxes.

[DotVaDa]

Originally Posted by HoustonCPA

HOA dues are never deductible/"itemizable" when it comes to personal income taxes.

Right I know monthly dues are not deductible, I have a MUD tax from the water and garbage that services all home owners in our community that we have to pay annually. Sorry for the confusion, that’s why I never do my own taxes and use a CPA. lol

Thank you for providing clarification.


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[NickM]

Originally Posted by HoustonCPA

HOA dues are never deductible/"itemizable" when it comes to personal income taxes.

They have been if it's on an investment property, but that's a business expense deduction. I do not yet know if that has changed, although I don't expect it did.

[asujbl]

Connecticut problems.

In reality it is time to start planning

Yes I’m a CPA

[HoustonCPA]

This new tax act also disallows hobby deductions that are subject to the 2% limitation reported on Schedule A starting with the 2018 tax year: https://www.blowoutforums.com/showth...2#post13067792

[Siberian13]

How much does the house have to worth for this to be an issue? $750K?

[Dobber2330]

Originally Posted by Siberian13

How much does the house have to worth for this to be an issue? $750K?

Not even close - in IL the taxes on an average 300k house are 10k per year. Throw in the state taxes and this new plan hurts.

[NeedChapmans]

Originally Posted by Dobber2330

Not even close - in IL the taxes on an average 300k house are 10k per year. Throw in the state taxes and this new plan hurts.

The three big benefits of the new tax code are and extra $1,000 tax credit per child (some of it refundable against payroll taxes), lower income brackets for everyone and a much lower corporate tax rate which is supposed to bump the economy to the next level.

The primary loser is a person without children in a high taxed state (NY, IL, CA, CT, MA) that owns property. Variations of this kind of person means smaller losses, but if you own property in one of these states and consider yourself middleish class, you likely lose.

Anyone that planned to take the standard deduction in 2018 is a winner. Those that didn't ... iffy.

[Siberian13]

Does this change anything?

https://news.google.com/news/amp?cau...%2F#pt0-382519

[jewcer2k5]

Originally Posted by NeedChapmans

The three big benefits of the new tax code are and extra $1,000 tax credit per child (some of it refundable against payroll taxes), lower income brackets for everyone and a much lower corporate tax rate which is supposed to bump the economy to the next level.

The primary loser is a person without children in a high taxed state (NY, IL, CA, CT, MA) that owns property. Variations of this kind of person means smaller losses, but if you own property in one of these states and consider yourself middleish class, you likely lose.

Anyone that planned to take the standard deduction in 2018 is a winner. Those that didn't ... iffy.

Hooray.

Fwiw the $1k tax credit per child is not as simple as you’re making it seem. From what I’m told by one of the tax attorneys I know. It’s a $1k tax credit but they are removing a $4k tax deduction. In essence it’s a wash for folks in a 25% bracket.

[preakness]

I’m sticking it to the government

I have a sweet futon in my parent’s basement and only pay $80/ month rent

Plus free cable and mom does laundry

Read this morning that IRS said paying early might not matter and bunch of confusion in Virginia

[KB81]

pshhhhh taxes... who pays taxes?

[Bostonsports1]

IRS is disallowing deduction of pre-paid 2018 taxes. They need to be assessed in 2017 to be allowed so no use in prepayment.

[Siberian13]

Originally Posted by KB81

pshhhhh taxes... who pays taxes?

You get it. Paying taxes is for suckas!

[KB81]

Originally Posted by Siberian13

You get it. Paying taxes is for suckas!

[Siberian13]

I’m going to need a change of pants ASAP!

[TarjetasBéisbol]

Payment sent.

[KB81]

Originally Posted by Siberian13

I’m going to need a change of pants ASAP!

Easy there cowboy. Let's not rush the process.

[hairysasquatch]

Upon reflection the notion of giving even more of my money up front is repulsive.
I'm going to just let the chips fall where they may.