Anyone else prepaying property taxes so you can still deduct them this year?

[platamama]

Under the new Tax bill just voted on, my middle class family will be paying $4500 MORE in federal taxes, thanks to the removal of personal exemptions next year. As if this time of year isn't crazy enough, now I have to go to the County Building to try and pay property taxes in advance in order to save myself over $1000. Grrr.

 

[kymom99]

Ours are due in the fall anyway

 

[tvguy]

According to the last IRS figures, which are from 2013, only 30.1 one percent of all Americans qualified to itemize on their taxes.
I'm in the 68.5% who get a larger deduction by taking the standard deduction.
But yes, if you are in a high income bracket and can itemize, and your property taxes are over $10,000 a year, there could be an advantage to pre-paying your property taxes.

 

[havaneselover]

No but I'm making an extra mortgage payment (paying 12/29 instead of 1/1 so I'll make 13 this year) and paying off a donation pledge. Those two things should save me about $300 since I won't be able to itemize going forward.

 

[chicagoshannon]

You must be in a high tax state. We are also but our property tax is under $10K so we'll still be able to deduct it. I am going through all of our closets to donate stuff since we won't be able to itemize.

I am looking forward to keeping more of our money. Paying less tax isn't a bad thing.

 

[platamama]

For 2018, the IRS allowances for standard deduction was going to be $13,000 (MFJ) and $4150/personal exemption. The stereotypical American family (2 adults, 2 children) will get a standard deduction of $24,000 instead of $29,600. We do itemize (state income taxes + property taxes + mortgage interest), so the hit to us is even higher for next year.

@havaneselover Yep, I'm planning on making an extra mortgage payment too.

 

[DisneyMandC]

I guess I need to sit down and reevaluate my tax plan. My husband and I are millennials who file our taxes separately because of my student loan debt. Filing separately means I pay $315 a month; filing jointly means I pay $1000 a month. I'm on the public service loan forgiveness track. I don't know enough about the standard deduction change and whatnot to tell if it would now be more advantageous to file jointly and have the student loan payment go up. I can't imagine we'd get THAT much back on our taxes to outweigh the costs.

Buh. Taxes.

 

[havaneselover]

For 2018, the IRS allowances for standard deduction was going to be $13,000 (MFJ) and $4150/personal exemption. The stereotypical American family (2 adults, 2 children) will get a standard deduction of $24,000 instead of $29,600. We do itemize (state income taxes + property taxes + mortgage interest), so the hit to us is even higher for next year.

@havaneselover Yep, I'm planning on making an extra mortgage payment too.

I'm head of household so I get $18,000. But am benefiting from rates coming down and the child tax credit doubling. So even with losing out on itemizing, I'm still up about $1,500. I have mixed feelings about the tax bill but certainly do feel terribly for people seeing their taxes going up.

 

[mjkacmom]

I'm head of household so I get $18,000. But am benefiting from rates coming down and the child tax credit doubling. So even with losing out on itemizing, I'm still up about $1,500. I have mixed feelings about the tax bill but certainly do feel terribly for people seeing their taxes going up.

Thank you. Living in a high tax state and losing these deductions really stinks, especially since we don’t have the money to prepay.

 

[platamama]

You must be in a high tax state. We are also but our property tax is under $10K so we'll still be able to deduct it. I am going through all of our closets to donate stuff since we won't be able to itemize.

I am looking forward to keeping more of our money. Paying less tax isn't a bad thing.

I'm not in a particularly high tax state. My property taxes are under 10K.

You won't be able to deduct your property taxes. Unless the sum of all your itemized deductions exceed your standard deduction (with this bill it's 12K for single filers and 24K for MFJ), you won't be able to deduct your property taxes. And you get to either itemize your state income taxes OR property taxes but not both.

 

[havaneselover]

Thank you. Living in a high tax state and losing these deductions really stinks, especially since we don’t have the money to prepay.

Trust me, I get it. My brothers are in CT and NJ (each with three kids--they look "rich" on paper but live paycheck to paycheck). I'm not fond of the government picking winners and losers, but they seem to like doing so

 

[havaneselover]

Here's a calculator for those so inclined:
http://taxplancalculator.com/

 

[DisneyMandC]

I'm not in a particularly high tax state. My property taxes are under 10K.

You won't be able to deduct your property taxes. Unless the sum of all your itemized deductions exceed your standard deduction (with this bill it's 12K for single filers and 24K for MFJ), you won't be able to deduct your property taxes. And you get to either itemize your state income taxes OR property taxes but not both.

No property tax deductions at all?! Mortgage interest deduction is remaining right?

 

[havaneselover]

I'm not in a particularly high tax state. My property taxes are under 10K.

You won't be able to deduct your property taxes. Unless the sum of all your itemized deductions exceed your standard deduction (with this bill it's 12K for single filers and 24K for MFJ), you won't be able to deduct your property taxes. And you get to either itemize your state income taxes OR property taxes but not both.

Are you sure? My understanding of the SALT deduction is the limit is $10K but it is not either/or.

http://money.cnn.com/2017/12/20/pf/salt-deductions-new-tax-plan/

 

[platamama]

I'm head of household so I get $18,000. But am benefiting from rates coming down and the child tax credit doubling. So even with losing out on itemizing, I'm still up about $1,500. I have mixed feelings about the tax bill but certainly do feel terribly for people seeing their taxes going up.

Not to make you feel bad, but you would've gotten $9550 (std deduction for HH) + 3($4150 personal exemptions) = $22,000 in non-taxable income vs the $18,000 this tax bill allows you now. Maybe that still works in your favor, just depending on your tax bracket.

 

[havaneselover]

Not to make you feel bad, but you would've gotten $9550 (std deduction for HH) + 3($4150 personal exemptions) = $22,000 in non-taxable income vs the $18,000 this tax bill allows you now. Maybe that still works in your favor, just depending on your tax bracket.

For 2018 taxes, I'll pay about $2000 ($6,000-$4,000). For 2017 taxes, I'll pay about $3500. Doubling the child tax credit makes the difference for me.

 

[havaneselover]

No property tax deductions at all?! Mortgage interest deduction is remaining right?

I don't think that's accurate and mortgage deduction survives up to $750K. But you can't itemize if deductions are less than new/higher standard deduction.

 

[piccolopat]

This bill will cost us thousands. Like others, we are in one of the highest tax states (NY). Are property taxes alone are $18K without the high state income taxes we also pay. We will see a big increase in our income taxes. Since we're almost retired, our mortgage will be paid off in a few years and our DD is grown so no child credit for us. I wrote to several members of Congress and asked them to at least consider retaining full SALT for families making up to $300K (middle class in this area, suburbs of NYC) but I got no responses. We'll move to Florida in a couple of years but until then...

 

[cedricandsophie]

Our accountant said because we are subject to alternative min tax this year, it wouldn’t help. Otherwise I would have prepaid real estate and state income tax.

 

[platamama]

No property tax deductions at all?! Mortgage interest deduction is remaining right?

Property tax deduction up to a 10K cap. Mortgage interest deduction is remaining if you have an mortgage up to $750,000. Or if you already have a mortgage you're grandfathered in. HELOC interest not longer is deductible.

Are you sure? My understanding of the SALT deduction is the limit is $10K but it is not either/or.

http://money.cnn.com/2017/12/20/pf/salt-deductions-new-tax-plan/

Thanks for the link. I swear I read it was an either/or thing but can't find it now...also the bill has kept changing, so maybe that changed too.

All these itemized deductions will only do any good if the sum exceeds your new standard deduction. Since personal exemptions were erased, you don't get that additional buffer.