The Internal Revenue Service’s Wednesday guidance upended many taxpayers’ plans of paying their 2018 property taxes early to claim a federal deduction before new tax law takes effect in January.
If you’re thinking of prepaying – or if you have already prepaid – here are a few things to keep in mind:
- Check your tax-assessment dates – Make sure your local tax office has assessed your property for 2018.
- Beware the AMT- Make sure that by prepaying your property taxes you wouldn’t become eligible to pay the alternative minimum tax.
- Make sure your state and local tax bill is high enough – Try to determine whether your total state and local tax bill next year will exceed the $10,000 cap that was added to the law.
- Speak with your mortgage provider – Many homeowners pay their property taxes through an escrow account set up by the mortgage provider.
- Talk to a professional – Finally, and most importantly, talk to your tax adviser. Circumstances vary by household.