Rental Property Investor · Seattle, WA · Member since 2016 · 524 posts · 148 votes
There's a lot of buzz out there on this. I know most comments won't be front CPAs or tax professionals. I might be a little late on this, but should I pay my 2018 property taxes now before the year runs out?
Investor · Wellington, KS · Member since 2016 · 256 posts · 188 votes
8y
If it is for rental properties, the deductibility hasn't changed so no need to prepay. If it is your primary residence, then first evaluate whether your state income tax (or sales tax) plus property taxes will exceed $10,000, if no, then no need. Finally, the IRS guidance issued this week states that unless the property taxes have been assessed, they aren't deductible in that tax year. I don't know about the assessment process in Washington state so I am afraid I can't give you state specific information.
Yes, you can wait and deduct in 2018, too, but the reason to prepay is not because you won't be able to deduct it next year. It is to grab your tax deduction in the current year, one year sooner.
Even more important this year, because the rates are going down, so you should generally get more mileage out of your deduction this year.
Of course notice my "generally" safety valve. There're plenty of possible scenarios where paying next year could be better, but it would require a case-by-case analysis.
Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
8y
@Gulliver R. - now, the state law prohibition pointed out by @Nghi Le is an entirely different conversation. I'm no expert in your state law, but obviously you can't pay something that the state is not allowed to accept.
Im not that smart but got an email from on accounting firm ( i make no representation on this but sharing as a point of view and leaving out the name )
The IRS announced on 12/27/17 that prepaid 2018 property taxes will not be deductible in 2017 if they have not been assessed. https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-assessed-and-paid-in-2017The IRS announcement was in response to recent reports advising individuals to make a prepayment of 2018 property taxes on the national evening news, 12/27/17 cover of the wall street journal as well as the governor of New York bringing in additional employees to accept prepayments. We are in a rapidly changing tax environment. It is difficult to stay ahead of the tax laws when they continue to change on 12/27/17. We will continue to review the new tax law and keep you informed of any potential planning opportunities.
Investor · Wellington, KS · Member since 2016 · 256 posts · 188 votes
8y
@Michael Plaks actually we agree. I assumed (perhaps incorrectly) that the OP was asking about whether he should prepay in light of the new limitations on the deductibility of some property taxes for 2018. Of course, you are correct about the general strategy of accelerating deductions especially into higher tax bracket years.