Homeowners scramble to pre-pay property taxes

Some homeowners — particularly those with high property taxes — are spending this last week of 2017 in lines at county offices looking to pre-pay 2018’s tax bill before the end of the year.

That’s because the new tax bill that passed last week puts a cap on the amount you can deduct for state, local and property taxes at $10,000. Currently the deduction is unlimited. In some high-tax states like New York, New Jersey and Maryland, that means some homeowners will be paying a lot more in taxes.

The three counties with the highest median tax bills in the country — Nassau County, Rockland County and Westchester County, which are all in New York — have median tax bills exceeding the $10,000 cap, according to the Tax Foundation.

While some jurisdictions have long allowed for pre-payment, others are scrambling, working to ensure that those who want to pre-pay can — even if the jurisdiction can’t necessarily guarantee the pre-payment will be deductible.

Montgomery County, Maryland, just outside of Washington DC, did not previously allow for pre-payment. That rubbed some homeowners the wrong way after the tax bill was signed into law. Especially when their neighbors in nearby counties and jurisdictions, including Fairfax county in Virginia and Washington DC, could pay ahead.

 “It just never came up,” said George Leventhal, Montgomery County council member. “No one was saying, ‘Please let me make early payment of a bill I don’t owe.’ Wise cash management suggests you should pay closer to the due date, not farther away. But because of this change, it seems it could be possible that people could derive some benefit and deduct their property taxes for next year in 2017.”

The county broke its winter recess and called a special session on Tuesday, the day after Christmas, passing a bill 7 to 1 in favor of allowing residents to pre-pay their 2018 tax bills.

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Shared from: cnn.com