Are Property Taxes Still Deductible in 2018?

Are Property Taxes Still Deductible in 2018?

There is a new tax law that sets off the scramble of final-minute tax moves as the taxpayers were trying to increase the property tax deduction. But, all of the prepayments were not actually deductible. Also, all of the taxpayers were not there who did wait lost the deductions. Following is the most recent IRS guidance regarding the property taxes.

What Actually Happened to Property Tax Deductions in the Latest Tax Plan?

The latest tax plan sets one new 10,000 dollars limit on the deductions for income as well as property taxes. These 2 taxes have just one combined limit hence taxpayers in the states of income tax can lose entire or a part of the property tax deductions even in case the property taxes are less than 10,000 dollars. This limit actually is affected for the year 2018 taxes that will be filed in the year 2019.

Why was everyone running for prepaying their property taxes while 2017 was ending?

The taxes for the calendar year 2017 are still following old tax code. This old tax code did not have any limit on the property tax deduction hence people with the tax bills more than 10,000 dollars were actually trying to ignore the latest limit through prepaying before on 31st December 2017.

Could I Deduct the Property Taxes That I Have Paid in the Year 2018 on Tax Return 2018?

Yeah, the property taxes that you give in the year 2018 as well as future years would be deductible. In case you did not pre-pay the 2018 tax returns in the year 2017, you did not lose any deduction.

There is just one exception that is starting with the 2018 tax year; you could just deduct the very first 10,000 dollars of the state income and combined property taxes in case they are more than that amount.

Could I Deduct Property Taxes of 2018 on the Tax Return 2017?

IRS has announced that there are 2 conditions. These both conditions should be met in order to deduct property taxes 2018 on the tax return 2017.

  • Paid in the year 2017: It means that you just physically made your payment by credit card, checks, or cash not later than 31st December 2017.
  • Assessed in the year 2017: It means that the local government had assessed your property tax. It sent you a bill not later than 31st December 2017. In case you actually made your payment before the bill got sent, the payment would be not deductible in the year 2017.

The major aim of these 2 techniques is to remain consistent with the intent of tax law that the property taxes 2017 are typically deductible under federal taxation rules 2017 and property taxes 2018 are also deductible under federal taxation rules 2018.

What in case I gave my taxes of 2018 in the year 2017 and could not deduct these in 2017?

In case you had pre-paid the taxes in the year 2017. Also, you have some questions in your mind then it could be a nice idea to talk to some tax expert about deductions and ask whether this applies to someone’s situation or not.

In case you have some other questions regarding how the latest tax law affects your business or family then you might ask from a tax preparer.

IRS Conditions for Deduction of Property Taxes 2018 

The statement of Internal Revenue Service regarding tax deductions comes as the homeowners in tax states with higher property taxes that were peppering the local officials along with many questions like how to give the levies in order to attempt to take an advantage of the tax break which would be limited in the coming year.

IRS advisory also notes that local as well as state laws actually determine when and whether the property tax’s generally assessed. Also, some of the localities haven’t still assessed property taxes 2018. The taxpayers must check with the local and state taxing authorities in order to determine the real property 2018 assessments. Each and every taxpayer will not be benefited from making the early payments of property tax. A sincere advice is that you must consult a tax expert.

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