City residents can pay property taxes early due to new tax law (calculator, amount)

[Goinback2011]

The IRS said Wednesday that some homeowners who prepay local property taxes due in 2018 will be able to claim the deduction on this year's returns, but only if the taxes have already been assessed and billed. People can't guess at what next year's assessment might be, pay it now and claim a deduction for that amount.

https://www.yahoo.com/news/long-line...174906507.html

[gg]

Hope the IRS doesn't allow these wealthy people prepayments. Time to pony up the money and stop all the gimmicking.

[WhoIsStanwix?]

Originally Posted by gg

Hope the IRS doesn't allow these wealthy people prepayments. Time to pony up the money and stop all the gimmicking.

This is an issue that disproportionately affects the middle and upper-middle class. Wealthy folks make their money via investment income, dividends, and other passive methods. They also are much more likely to have trusts and corporations structured to efficiently manage their wealth.

The state and local tax deduction issue is very well illustrated by selltheburgh - if you make 100k and live in a home that is about average cost for your income in Allegheny county, you will likely benefit if the IRS allows for prepayment. Last I checked, $100K isn't "wealthy" (though it may seem like high income to some). To those who fall in this bucket, it now feels like "double taxation" is the standard. Double taxation was reduced for those who own businesses and increased for those who do not.

[UKyank]

Originally Posted by WhoIsStanwix?

This is an issue that disproportionately affects the middle and upper-middle class. Wealthy folks make their money via investment income, dividends, and other passive methods. They also are much more likely to have trusts and corporations structured to efficiently manage their wealth.

The state and local tax deduction issue is very well illustrated by selltheburgh - if you make 100k and live in a home that is about average cost for your income in Allegheny county, you will likely benefit if the IRS allows for prepayment. Last I checked, $100K isn't "wealthy" (though it may seem like high income to some). To those who fall in this bucket, it now feels like "double taxation" is the standard. Double taxation was reduced for those who own businesses and increased for those who do not.

Wealthy people will certainly have higher property tax bills due & passive income is also taxed so it’s not as if they are receiving any free lunch here.
I may not like the new tax bill personally for many reasons (though in the end I suspect it does reduce my taxes slightly) but if we’re being honest, this local/state/property tax cap still primarily only effects those that are doing better then most & it makes little real sense to be able to reduce one’s federal tax bill because of other taxes one pays. Everyone wants people to pay their fair share so long as it’s someone else paying.

[PghYinzer]

Originally Posted by UKyank

Wealthy people will certainly have higher property tax bills due & passive income is also taxed so it’s not as if they are receiving any free lunch here.
I may not like the new tax bill personally for many reasons (though in the end I suspect it does reduce my taxes slightly) but if we’re being honest, this local/state/property tax cap still primarily only effects those that are doing better then most & it makes little real sense to be able to reduce one’s federal tax bill because of other taxes one pays. Everyone wants people to pay their fair share so long as it’s someone else paying.

My beef with the whole SALT deduction change is that in certain states and localities people have chosen to live with high taxes in order to build and pay for the system they desire. This deduction has been the way it has since the inception of the Federal Income Tax in 1913. These states and localities tend to be more urban, liberal, and vote democratic, which makes them prime for targeting by the current Congress and administration. It’s an easy way to collect more revenue for the federal government to help plug a deficit hole (although they still fail in doing so by $1.5 trillion) that benefits corporations and the extremely wealthy more than anyone else. Additionally, this removes power from the states by absorbing more taxable resources from the states and transfers it to the federal government.

For a party that use to be all about states rights and shrinking the federal government it is all very calculated. They are simultaneously shrinking the work and oversight done by the federal government, with plans to do “welfare reform”, while at the same time making a huge money grab from the states to pay for their own raiding of the federal coffers. If it wasn’t reality, it would make for a great book.

Does anyone know if Pgh and Allegheny county are assessing the taxes already? The catch with prepaying is that they have to be actually billed or they don’t count.

[UKyank]

Originally Posted by PghYinzer

My beef with the whole SALT deduction change is that in certain states and localities people have chosen to live with high taxes in order to build and pay for the system they desire. This deduction has been the way it has since the inception of the Federal Income Tax in 1913. These states and localities tend to be more urban, liberal, and vote democratic, which makes them prime for targeting by the current Congress and administration. It’s an easy way to collect more revenue for the federal government to help plug a deficit hole (although they still fail in doing so by $1.5 trillion) that benefits corporations and the extremely wealthy more than anyone else. Additionally, this removes power from the states by absorbing more taxable resources from the states and transfers it to the federal government.

For a party that use to be all about states rights and shrinking the federal government it is all very calculated. They are simultaneously shrinking the work and oversight done by the federal government, with plans to do “welfare reform”, while at the same time making a huge money grab from the states to pay for their own raiding of the federal coffers. If it wasn’t reality, it would make for a great book.

It still however means that anyone, regardless of what state or city they live in, who is still itemizing deductions for 2018 after the increased standard deductions & various credits in the new bill, that person is wealthy compared to most of the country & can afford to kick in a few extra bucks if they’re living within their means & I doubt will garner much sympathy from the rest of the masses. Most people donthave overly large local or state taxes because they don’t make six figures & most people don’t have large property tax bills because they don’t have expensive homes. I agree that you don’t have to have a million dollar house to be effected as others have suggested but it’s being disingenuous to not admit that this tax deduction cap on state/local/property taxes will effect anyone but the wealthier 25% of the country.

As to whether the prepayments here will count, that depends on the IRS interpretation. Unlike Philadelphia who sends out tax bills for the following year in December, Pittsburgh doesn’t do so until later in the year, but the receipts they are giving for this weeks payments say 2018 on them & make no mention of an estimated payment. It’s all still an unknown.

[PghYinzer]

Originally Posted by UKyank

It still however means that anyone, regardless of what state or city they live in, who is still itemizing deductions for 2018 after the increased standard deductions & various credits in the new bill, that person is wealthy compared to most of the country & can afford to kick in a few extra bucks if they’re living within their means & I doubt will garner much sympathy from the rest of the masses. Most people donthave overly large local or state taxes because they don’t make six figures & most people don’t have large property tax bills because they don’t have expensive homes. I agree that you don’t have to have a million dollar house to be effected as others have suggested but it’s being disingenuous to not admit that this tax deduction cap on state/local/property taxes will effect anyone but the wealthier 25% of the country.

As to whether the prepayments here will count, that depends on the IRS interpretation. Unlike Philadelphia who sends out tax bills for the following year in December, Pittsburgh doesn’t do so until later in the year, but the receipts they are giving for this weeks payments say 2018 on them & make no mention of an estimated payment. It’s all still an unknown.

My issue is not with having to kick in a few extra bucks but rather why it was done. It wasn’t done to improve anything, it was done as a means of sticking it to a certain segment of the country (determined by geography) to help minimize the benefits to another segment of the country (the richest of the rich). Neither of those segments are the working poor who need the most help and are getting nothing in comparison.

Perhaps since Pgh is using the same tax rate as last year they are able to produce bills on demand for those who want to prepay and thus skirting the issue with bills needing to be sent prior to Jan 1.

[UKyank]

Originally Posted by PghYinzer

Perhaps since Pgh is using the same tax rate as last year they are able to produce bills on demand for those who want to prepay and thus skirting the issue with bills needing to be sent prior to Jan 1.

Agree, technically since there is no rate change or reassessment going on it shouldn’t matter but I do know that the city has to officially certify the property tax annually & that won’t take place until 2018 so not sure if that puts a wrench into things. The IRS did nothing to clarify things with their last release sadly.

[Goinback2011]

Originally Posted by UKyank

Agree, technically since there is no rate change or reassessment going on it shouldn’t matter but I do know that the city has to officially certify the property tax annually & that won’t take place until 2018 so not sure if that puts a wrench into things. The IRS did nothing to clarify things with their last release sadly.

The IRS statement was clear. If there is no bill for taxes due in 2018 by Dec 31, you're not eligible.

[UKyank]

Originally Posted by Goinback2011

The IRS statement was clear. If there is no bill for taxes due in 2018 by Dec 31, you're not eligible.

They say for taxes due “the real property taxes are assessed prior to 2018....State or local law determines whether and when a property is assessed”

So no, it’s not clear as the city code is not clear on what ‘assessed’ (for date purposes) is in any year where there is not a new assessment occurring. Is a prepayment an estimated payment when the amount due is already known?

It also needs to be understood that an IRS Advisory statement has no legal authority anyways.