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It really is. For one, the irs may not allow the deduction, and two, it's unnecessary. 80 to 85% on li will just take the new standard deduction that has doubled, and get back what they always get back.
The sheeple mis-information part is funny.
There are definitely people who may benefit by paying early, but there’s a crapload more that this makes no difference for but they are running out scared poopless anyway and paying.
Suppose median mortgage is around 330k with APR at 4.25%, annual mortgage interest is around $14k.
If you add them up, state income tax around 5k + property tax 10k = 15k which is less than 24k.
Now for the median itemized deduction before the "tax cut", 15k+14k = around 29k which is still slightly more than the 24k standard deduction. With the 10k cap on local taxes, median long islander will take the 24k standard deduction as the itemized one is only 10k+14k = 24k.
For better or worse, the median long island household with 2 kids, with the previous tax code, has total deduction at personal deduction 16200 + itemized deduction at 29k = $45200. With the "tax cut", the median household will have 24k deduction, and that's about it.
As a result, taxable income for median long islander will increase 45200-24k = 21k per year. Now depending on the kids age, the median long islander could be better off or worse off. If both kids are less than 17 years old, the household could be better off because of the child tax credit of 2k each for 4k total. If one of the kid is 17, the likelihood of higher tax could be big.
It looks like the IRS has issued an advisory on this
A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.
Let me guess you pay more than 20k in property taxes?
Not even close $12,470 after star. I would never in a million years pay 20k, we are fortunate and can afford to pay 20k but I wont. My cap is 15.2k after star. I want to move but I refuse since I can't find a house I like under 20k.
It looks like the IRS has issued an advisory on this
A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.
Well the amounts have been assessed now in '17 it seems, as we all know the exact figure we would owe for '18 General Taxes. 4900 page PDF anyone?
At any rate, TOB would definitely want the money sooner than later so they will push this regardless. The question is whether the IRS will see it that way and from that text, they should.
Dumb question but how do you pre pay when the bank holds it in escrow?
Not a dumb question, I was wondering the same thing since Taxes are escrowed in with our monthly mortgage payment. We pay around $13K/yr for school/general taxes. I called our bank (Bethpage)and was told that we just have to show proof of pre-payment and a new escrow analysis will be done. We opted to prepay school and general taxes today. We went to Town of Hempstead (200 N Franklin Ave, Hempstead)and stood on line for 45 min. Just brought our checkbooks and the teller pulled up the 2018 bills and told us the amount right there, we wrote the check and stood on another shorter line to pay the cashier. We itemize our deductions on taxes so figure for 2018 returns, we might save something.
Must be nice to have cash on hand to pay a year's taxes up front.
All calculators show mine as a wash, maybe goes up a little maybe goes down, but that is based SOLELY on:
SALT, Prop Tax, Mtg Int and Charitable Donations. vs the new standard $24k + $2k child credit + $10k mtg int.
BUT, can someone explain how the hell I offset the lost Personal Exemption of $12,150 (3 x $4050). I'd really appreciate it. I do not see how this gets offset and guarantees my taxable income is $12k higher. No way that gets offset by "lower rates."
Someone, please explain. Am I missing something, or just discovered I'm going to get taken to the cleaners? New tax plan fanboys? Anyone?
Not like I could pay it now anyway unless they take plastic! lol
Must be nice to have cash on hand to pay a year's taxes up front.
I read the "avg household credit card debt is $16k" in the US (source). Think about that... one house could have no debt while another could have $32k. And that's just credit cards. I don't imagine many here are irresponsible and living with that much CC debt but I'm sure a lot are close to paycheck-to-paycheck from household expenditures. I don't think having $5k-$10k in savings to pay off taxes is out of the ordinary though. That's the minimum amount of "oh-****" money people need to keep aside in case they get canned.
What I am surprised at though is how many who could afford to live here aren't affected by AMT. Must be some deduction trickery going on.
I'm going to mail mine in today to TOB. I am not going near one of their offices. They say you can mail it in as long as it's postmarked and dated with a 2017 date. They likely don't want you showing up and will gladly take your 2017 payment by mail. I'll certify it just so i have good proof i sent it.
Im sure the line at the post office will be less than the line at the tax office.
Must be nice to have cash on hand to pay a year's taxes up front.
All calculators show mine as a wash, maybe goes up a little maybe goes down, but that is based SOLELY on:
SALT, Prop Tax, Mtg Int and Charitable Donations. vs the new standard $24k + $2k child credit + $10k mtg int.
BUT, can someone explain how the hell I offset the lost Personal Exemption of $12,150 (3 x $4050). I'd really appreciate it. I do not see how this gets offset and guarantees my taxable income is $12k higher. No way that gets offset by "lower rates."
Someone, please explain. Am I missing something, or just discovered I'm going to get taken to the cleaners? New tax plan fanboys? Anyone?
Not like I could pay it now anyway unless they take plastic! lol
You cannot take the 10k MTG INT if you take the 24k standard deduction. You will also lose the personal deduction. So your taxable income will be 22k higher.
The child tax credit of 2k each is after you figure out your tax based on your taxable income. It does not reduce your taxable income, but it reduces your final tax.
As a result, child tax credit encourages ppl to have more kids. Suppose someone needs to pay 10k tax based on taxable income. With 5 kids , 5x2k = 10k child tax credit, the person will pay 0 income tax.
For long islanders the key on the tax are whether your income is higher enough so that lower tax rates could compensate for the higher taxable income, whether you have kids so that you can claim 2k each tax credit to reduce tax, and whether you hit enough AMT or not.
If you are middle income with no kids or 1 kid, and do not hit AMT before, most likely your tax will be higher
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