paying property taxes early?

Gilligan

#*! boat!
PREMO Member
But, IRS, on same day, said it would only work if the taxes were actually assessed in 2017. What the heck does assessed actually mean? The tax bill was printed and mailed? If yes, that isn't done until 2018.
IRS guidance seemed pretty clear to me....if you have not been billed for it, you cannot pay early and deduct it. TJ was just spewing nonsense. No way awpitt can show a bill for the 2018-2019 property taxes either.

:yawn: time to move on.
 
Last edited:

sastanley

Member
IRS guidance seemed pretty clear to me....if you have not been billed for it, you cannot pay and deduct it.
So, anyone know how long the line is up in L-town today? :whistle:

From the IRS site posted earlier..." A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. "

Seems like they are wasting their time to me too.
 
Last edited:
SALT puts me over 10k. But I'm all for getting rid of this write off. High tax states should not expect federal reimbursement to citizens to offset budget choices specific for the state. If a state citizen agrees with higher state level expenses, other state's citizens shouldn't have any burden. If we want lower state taxes, then we need to forfeit some expenditures.
 
A realtor friend just sold a property in st mary's, 40k cash, buyer had to pay current due taxes and 2018 taxes.
This was a few months back before all this tax talk.. so apparently you can prepay, and i'm guessing required
by law to do it in certain purchasing situations.
 

Gilligan

#*! boat!
PREMO Member
A realtor friend just sold a property in st mary's, 40k cash, buyer had to pay current due taxes and 2018 taxes.
This was a few months back before all this tax talk.. so apparently you can prepay, and i'm guessing required
by law to do it in certain purchasing situations.

At closing, the buyer reimburses the seller for the property taxes that have already been paid for the period starting from the date of sale to the end of the tax period. So any taxes paid would have been for the 2017-2018 tax period. Nothing remotely related to what would be owed for the 2018-2019 tax period which is what some erroneously claimed could be paid before 31 Dec 2017 as a deductible on 2017 Schedule A.
 
At closing, the buyer reimburses the seller for the property taxes that have already been paid for the period starting from the date of sale to the end of the tax period. So any taxes paid would have been for the 2017-2018 tax period. Nothing remotely related to what would be owed for the 2018-2019 tax period which is what some erroneously claimed could be paid before 31 Dec 2017 as a deductible on 2017 Schedule A.
That sounds logical however I did clarify, it was for next year's taxes, that had to be paid, in advance... in addition to the current taxes which were unpaid and behind.. and it was required to make the sale, because the sale almost didn't happen because of it.

The sellers had to drop their agreed price to make it work.
 

NorthBeachPerso

Honorary SMIB
That sounds logical however I did clarify, it was for next year's taxes, that had to be paid, in advance... in addition to the current taxes which were unpaid and behind.. and it was required to make the sale, because the sale almost didn't happen because of it.

The sellers had to drop their agreed price to make it work.
If the taxes were paid in installments the second one is due just about now. That might be what they paid.
 

Gilligan

#*! boat!
PREMO Member
That sounds logical however I did clarify, it was for next year's taxes, that had to be paid, in advance... in addition to the current taxes which were unpaid and behind.. and it was required to make the sale, because the sale almost didn't happen because of it.

The sellers had to drop their agreed price to make it work.
you sure that "next years taxes" didn't refer to those for the Jan -June timeframe? Because beyond that, everyone would only be guessing what the taxes would be and they would be a LONG way off from actually being billed or owed. Or if the sale was in the June timeframe of , for example, 2017, then the tax bill for July 2017 through July 2018 would be in hand no soon becoming due.

But back to the original point....nobody has a bill for their property taxes for the 2018-2019 period that they can pay today.
 
Last edited:

Ken King

A little rusty but not crusty
PREMO Member
you sure that "next years taxes" didn't refer to those for the Jan -June timeframe? Because beyond that, everyone would only be guessing what the taxes would be and they would be a LONG way off from actually being billed or owed. Or if the sale was in the June timeframe of , for example, 2017, then the tax bill for July 2017 through July 2018 would be in hand no soon becoming due.

But back to the original point....nobody has a bill for their property taxes for the 2018-2019 period that they can pay today.
You are already in 2018 for Maryland's fiscal year.
 

officeguy

Well-Known Member
Exactly. And the bill was paid from escrow back around 1 August.
Residential can opt to pay in 2 payments with the second due on Jan 20th. I already have that bill in hand so paying this calendar year rather than next made sense. What you cant do is pre-pay your FY 19 bill that you won't get until June.
 

Gilligan

#*! boat!
PREMO Member
Residential can opt to pay in 2 payments with the second due on Jan 20th. I already have that bill in hand so paying this calendar year rather than next made sense. What you cant do is pre-pay your FY 19 bill that you won't get until June.
I was aware of that. And the fact that you cannot prepay 2019 was my main point all along...and where ole TJ was so far off base, as she so often is. Apparently my mortgage company likes to just pay the whole thing in one wack as soon as they get it, so nothing is currently owed until July of 2019 rolls around. So...nothing there to be paid early.
 

direxpgw

Member
I was aware of that. And the fact that you cannot prepay 2019 was my main point all along...and where ole TJ was so far off base, as she so often is. Apparently my mortgage company likes to just pay the whole thing in one wack as soon as they get it, so nothing is currently owed until July of 2019 rolls around. So...nothing there to be paid early.

I'm not 100% certain that this is in fact true (not deducting 2018-19 prepay from 2017 return). The law specifically spells out the denial of income tax and yet leaves open a lot of interpretation on property tax. IRS guidance pertains to when a locality assessed the taxes. That's still kinda vague. In areas in MD where your 3 yr reassessment has already been made and per the Homestead act, you know what your taxes are limited to for subsequent years, the argument could be reasonably made that the assessment has in fact already been made for your next 1-3 years. Iow, you already know what your taxes will be capped at and henceforth what your assessment will be. Its so fuzzy and so many people have already pre paid it across the country, that you cant go wrong by paying it early. Youre gonna have to pay it anyway within the next year, and this govt is so wholly clusterf@#$%% with everything it lays its hands upon, that Id just pay it and claim it anyways and say to hell with it.
 

Gilligan

#*! boat!
PREMO Member
I'm not 100% certain that this is in fact true (not deducting 2018-19 prepay from 2017 return). The law specifically spells out the denial of income tax and yet leaves open a lot of interpretation on property tax. IRS guidance pertains to when a locality assessed the taxes. That's still kinda vague. In areas in MD where your 3 yr reassessment has already been made and per the Homestead act, you know what your taxes are limited to for subsequent years, the argument could be reasonably made that the assessment has in fact already been made for your next 1-3 years. Iow, you already know what your taxes will be capped at and henceforth what your assessment will be. Its so fuzzy and so many people have already pre paid it across the country, that you cant go wrong by paying it early. Youre gonna have to pay it anyway within the next year, and this govt is so wholly clusterf@#$%% with everything it lays its hands upon, that Id just pay it and claim it anyways and say to hell with it.

Too late now. But my accountant said no friggin way...would be another invitation for an audit when I have far too many as it is. My return runs to 20 pages ...
 

officeguy

Well-Known Member
I'm not 100% certain that this is in fact true (not deducting 2018-19 prepay from 2017 return). The law specifically spells out the denial of income tax and yet leaves open a lot of interpretation on property tax. IRS guidance pertains to when a locality assessed the taxes. That's still kinda vague. In areas in MD where your 3 yr reassessment has already been made and per the Homestead act, you know what your taxes are limited to for subsequent years, the argument could be reasonably made that the assessment has in fact already been made for your next 1-3 years. Iow, you already know what your taxes will be capped at and henceforth what your assessment will be. Its so fuzzy and so many people have already pre paid it across the country, that you cant go wrong by paying it early. Youre gonna have to pay it anyway within the next year, and this govt is so wholly clusterf@#$%% with everything it lays its hands upon, that Id just pay it and claim it anyways and say to hell with it.
Assessment only determines the value of the property. It doesn't represent a bill for the taxes.
IRS guidance is clear. You can only deduct amounts that you were invoiced for. Giving a loan to your local government by prepaying doesn't count just like putting money on account with a vendor doesn't count. It's an indebtness that you would have to list on your balance sheet.
The IRS audits only 1% of returns, however rapid changes are what tends to trigger audits. So if you deducted $5000 property tax for the past 5 years and this year you deduct 15, it may trip a flag.
 

Gilligan

#*! boat!
PREMO Member
Assessment only determines the value of the property. It doesn't represent a bill for the taxes.
IRS guidance is clear. You can only deduct amounts that you were invoiced for. Giving a loan to your local government by prepaying doesn't count just like putting money on account with a vendor doesn't count. It's an indebtness that you would have to list on your balance sheet.
The IRS audits only 1% of returns, however rapid changes are what tends to trigger audits. So if you deducted $5000 property tax for the past 5 years and this year you deduct 15, it may trip a flag.
I'm surprised TJ has not returned to admit how stupid her earlier post was
 
Top