Homeowners Who 'Outsmarted' IRS Get Rude Awakening

By Kate Seamons

December 28, 2017

Think you outsmarted the IRS? Maybe not. As news stories emerged about "unprecedented" lines forming at municipal offices as homeowners rushed to prepay 2018 property taxes before the new GOP tax bill goes into effect on Jan. 1, the Internal Revenue Service on Wednesday offered words of caution. With the deduction on state and local taxes, including property taxes, set to be capped at $10,000 starting next year, homeowners in states with high property taxes are hurrying to prepay 2018 before the new year so they can reap the full deduction.

But the IRS in an advisory warned such a move only works under "certain circumstances"—and it all boils down to assessments. Whether a homeowner's prepayment in 2017 will work "depends on whether ... the real property taxes are assessed prior to 2018."

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