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NEW YORK (CBSMiami) – Americans hoping to save some money on their next tax bill are trying to hurry up and hand over money before the new year.
Americans who own an expensive home or live near a big city like Atlanta or Dallas, or in a high tax state like California, Massachusetts or New York — are are scrambling to figure out if it makes sense to prepay their 2018 property taxes. The reason being, the tax overhaul signed last week by President Donald Trump puts a new ten-thousand-dollar limit on the amount of state and local taxes people can deduct from their federal tax bill.
Even accountants, though, aren’t always sure whether prepaying in 2017 will prevent the bigger hit in 2018.
The IRS posted an advisory on its website that basically boils it all down to this one, still somewhat complicated, sentence: “A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.”
In New York, Governor Andrew Cuomo issued an emergency order a few days ago, allowing prepayment of some property taxes. That may not help everyone though as some towns and counties have announced they’re not equipped to calculate the payments in time.
Critics of the Republican-led tax overhaul insist the cap disproportionately affects higher tax, blue states. States that, for the most part, did not support president Trump in the 2016 election.