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Yes, rental prop taxes (100% offset to rental income) are totally different than your personal residence Property taxes ('deduction' is only a slight benefit off your marginal tax rate) I/e you spend far more to get it, than it's benefit.
In our case, our property and school taxes alone are close to 10k. We are just under the 24k total. May be covered for 2018 by the standard deduction for joint married (fingers crossed).
[/quote]I doubt it... IIRC $24,400 proposed Std Ded (2 filers joint) is much less than 1/2 my average itemized deductions (and I am not wealthy) just an average hourly wage grunt (retired / W/o Pension).[/quote]
THe irs just put guidance that prepaying 2018 property tax before the property assessed for 2018 will not be deductible for 2017 income tax purposes
Lots of folks ran to the tax office to prepay and now they are learning it did them no good. My county only gives estimates so that won't count. It actually has to be an assessed bill.
We did pay-up our annual church pledge (which runs July-June) early. That'll pay off, assuming nothing unexpected happens (such as a new job with a big increase in pay, or loads of itemized deductions that we've never had before).
Our county (Wake) does an assessment every 8 yrs and the last one was in 2016. But the tax bill uses the parity model, which means the tax rate each year varies with the county budget. Once the budget is known, the tax is calculated based on the assessed value of the home and the tax rate. While there are no large changes (except in brand new homes), the dollar amount you are taxed each year varies slightly, with the tax bill not due until September, and not delinquent until the first of the next year. I wonder if you could pre-pay for 2018 this year based on 2017 taxes, then pay the added amount (a couple hundred dollars) in 2018? Seems that would be reasonable, but hey, this is the new era of no forethought.
Our county (Wake) does an assessment every 8 yrs and the last one was in 2016. But the tax bill uses the parity model, which means the tax rate each year varies with the county budget. Once the budget is known, the tax is calculated based on the assessed value of the home and the tax rate. While there are no large changes (except in brand new homes), the dollar amount you are taxed each year varies slightly, with the tax bill not due until September, and not delinquent until the first of the next year. I wonder if you could pre-pay for 2018 this year based on 2017 taxes, then pay the added amount (a couple hundred dollars) in 2018? Seems that would be reasonable, but hey, this is the new era of no forethought.
you may be confusing assessed value with assessment. From the information you've given, it sounds like the assessment (which is the liability for a particular year's property taxes) occurs when the budget is known and the rate is set.
I wonder if you could pre-pay for 2018 this year based on 2017 taxes, then pay the added amount (a couple hundred dollars) in 2018? Seems that would be reasonable, but hey, this is the new era of no forethought.
Same county here. I went and prepaid my 2018 prop taxes a few days ago (before the IRS saying it couldn't be deducted in 2017 if not actually billed yet), and yes it was estimated by the finance office to be the same as far as what they knew. Any change will be added to the bill that gets sent out.
A hypothetical question. If a married couple with two kids under the following situation, would the $10k limit in deduction hurt?
1) Income: $130K (all from w2)
2) 2 kids
3) property tax: $6K
4) state tax: $6K (CA)
5) mortgage interest paid $12K
6) put 10% of income into 401K
7) My total itemized deduction for 2016 was $25K.
no other deduction.
Last edited by jimmybirdie; 01-03-2018 at 10:38 AM..
A hypothetical question. If a married couple with two kids under the following situation, would the $10k limit in deduction hurt?
1) Income: $130K (all from w2)
2) 2 kids
3) property tax: $6K
4) state tax: $6K (CA)
5) mortgage interest paid $12K
6) put 10% of income into 401K
7) My total itemized deduction for 2016 was $25K.
no other deduction.
Looks like you will take the standard deduction of 24K in 2019. You will lose 1K in deductions...not a big deal.
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