Some homeowners — particularly those with high property taxes — are spending this last week of 2017 in lines at county offices looking to pre-pay 2018’s tax bill before the end of the year.
That’s because the new tax bill that passed last week puts a cap on the amount you can deduct for state, local and property taxes at $10,000. Currently the deduction is unlimited. In some high-tax states like New York, New Jersey and Maryland, that means some homeowners will be paying a lot more in taxes.
The three counties with the highest median tax bills in the country — Nassau County, Rockland County and Westchester County, which are all in New York — have median tax bills exceeding the $10,000 cap, according to the Tax Foundation.
Residents in New Jersey pay, on average, the highest property taxes in the nation. About 1,400 people in Hoboken prepaid their taxes through Thursday. Only about 100-200 people usually do that annually.
How to pre-pay your taxes
To pre-pay your own taxes within the next few days, you will need to check with your local jurisdiction to find out if it even allows for pre-payment and to learn more about the process.
Here are some things to keep in mind.
If you pre-pay you’re not guaranteed you’ll be able to deduct the payment. It will be up to the Internal Revenue Service to determine whether pre-payment of 2018 property taxes may be deducted for federal, state or local income tax purposes.
If you are currently getting your taxes escrowed, you’ll need to work with your escrow agency or mortgage company on any future adjustments to your escrow account. Usually escrowed taxes are a matter for the taxpayer and the taxpayers’ escrow agency to resolve.
Many jurisdictions may have either a pre-payment application or a requirement that a notice of intent to pay early accompanies payment.
Some areas will allow online payments. Anyone paying by check after today may have a difficult time since often the check must clear by the end of the year.
In some areas, homeowners are encouraged to avoid mailing payments, since they have to be received and recorded by the end of the year. Yet, other jurisdictions allow mailed payment to count so long as it is postmarked by Dec. 31.