IRS Issues Warning About Property Tax Loophole
December 29, 2017
Homeowners rushing to prepay their 2018 property taxes before a new tax law takes effect may be out of luck. On their website Wednesday, the IRS warned that prepayments on 2018 state and local taxes before January 1st may be deductible, but only if the municipalities have actually assessed the taxes before the year ends. The tax bill that President Trump signed last week caps itemized property tax deductions to $10,000, so many homeowners have been rushing to prepay their 2018 property taxes before their deductions expire at the end of the year.
Some high-tax states are fighting back against the new loophole. New Jersey Governor Chris Christie signed an executive order Wednesday requiring municipalities to credit the payments. The governor of New York signed a similar executive order last week.
And, tax collectors in Kentucky are warning homeowners that you can't pay taxes in that state until you receive your bill.