IRS: Payers can do so only if property taxes have already been assessed
Changes included in the Republican tax overhaul Congress approved and President Donald Trump signed into law have pushed many homeowners to rush to prepay their 2018 property taxes by the end of the year.
A key provision of the bill modifies a long-standing tax break that allowed individuals to deduct from their federal taxable income any state and local taxes paid that year, including real estate or property taxes. The tax overhaul only lets people deduct up to $10,000 in such taxes when calculating their federal tax liability.
The IRS said Wednesday that some homeowners who prepay local property taxes due in 2018 will be able to claim the deduction on this year’s returns, but only if the taxes have already been assessed and billed. People can’t guess at what next year’s assessment might be, pay it now and claim a deduction for that amount.
“A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017,” the IRS said on its website.
That distinction wasn’t always clear to people flooding into local taxes offices after Christmas, or to the officials trying to help them. But most thought it was worth a try.
“I know later on it is going to hurt me,” Scott Arbuse, of East Meadow, N.Y., said of the disappearing tax deduction as he waited to make a payment. “But at least I save some money now.”
Across the country, Steve Sheffield made the same calculation as he went to pay his taxes in Sacramento.
“My accountant told me it was the thing to do,” Sheffield told the Sacramento Bee. “Next year, I probably won’t be able to itemize.”
San Diego County Treasurer-Tax Collector Dan McAllister said if owners pay the second half of the current property tax bill, normally due by April 10, by the end of the year, they could avoid that new cap this one time, depending on their individual tax situation
There are three ways to prepay the April property tax bill:
Write an e-check via the tax collector’s website, sdttc.com. You’ll need to enter your property’s assessor parcel number and your bank’s routing number and account number. Online payment can also be made with a credit card, but there is a 2.19 percent surcharge.
Mail a check to McAllister’s office, P.O. Box 129009, San Diego CA 92112 with the parcel number and the word “2nd” on the check notation line to indicate the money is for the April bill. If that information is not included, clerks will return the check because they won’t know what the payment is for.
Hand deliver a check to one of McAllister’s five offices open 8 a.m. to 5 p.m. on business days — 1600 Pacific Highway downtown; 9225 Clairemont Mesa Blvd., Kearny Mesa; 141 E. Carmel St., San Marcos; 200 S. Magnolia Ave., El Cajon; and 590 Third Ave., Chula Vista.
San Diego Union-Tribune