Author Topic: PSA: Pay Your State Taxes Before 12/31/17 to Benefit From a Federal Deduction  (Read 8446 times)

Offline Work-for-ur-muny

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Just as a PSA: My accountant told me to make sure to pay any owed state taxes before January to be able to claim a deduction on my federal return.

P.S. This is probably painted all over the forums, and is thus a repost, but figured I'll give it it's own thread to bring it to the attention of a wider audience.

Offline noturbizniss

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Just as a PSA: My accountant told me to make sure to pay any owed state taxes before January to be able to claim a deduction on my federal return.

P.S. This is probably painted all over the forums, and is thus a repost, but figured I'll give it it's own thread to bring it to the attention of a wider audience.
1. Your 2017 taxes can be paid before April 15th to be deducted from 2017.
2.he probably neat prepay your 2018 taxes.
3. You can't deduct prepayments.
https://www.cnbc.com/2017/12/18/prepaying-2018-state-income-taxes-is-blocked-in-gop-bill.html
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Offline puddles

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Income Tax is blocked. But if your RE Taxes are higher then $10,000 speak to a CPA about prepaying.

Offline skyguy918

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Income Tax is blocked. But if your RE Taxes are higher then $10,000 speak to a CPA about prepaying.
Even if they're lower than $10k, if you're going to be using up the $10k limit with state and local income tax it still makes sense to prepay your 2018 property taxes where possible.

Offline EJB

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Even if they're lower than $10k, if you're going to be using up the $10k limit with state and local income tax it still makes sense to prepay your 2018 property taxes where possible.

Or if you're not going to be itemizing next year

Offline Dan

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Is there a limit of how much you can prepay property tax?
Can I pay for multiple years?
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline cozmohoot

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Is there a limit of how much you can prepay property tax?
Can I pay for multiple years?
Belongs in "perks of where you live" thread. Don't think people with 10k plus taxes will be prepaying..

Offline Work-for-ur-muny

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Belongs in "perks of where you live" thread. Don't think people with 10k plus taxes will be prepaying..
For spend threshold? Why not??!  :P

Offline noturbizniss

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For spend threshold? Why not??! 
What the fee? My town is 3.65% for cc
Is there a limit of how much you can prepay property tax?
Can I pay for multiple years?
Depends in ur state or locality. I belive u can pay as long as the chat he in generated. For me, in NJ, I can pay 18q1 and q2.
Or AYLGTO (Government tax officer)
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Online aygart

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My understanding is that some NJ municipalities (I heard about Jackson) are pregenerating 2018 tax bills upon request.

Note that it needs to be paid to the municipality and not your mortgage company.
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Offline JoeyShmoe

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My understanding is that some NJ municipalities (I heard about Jackson) are pregenerating 2018 tax bills upon request.

Note that it needs to be paid to the municipality and not your mortgage company.
On http://www.lakewoodnj.gov/ they only allow to pay the first 2 quarters, I guess I can try to call and request
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Online aygart

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How does it work with the mortgage escrow if you prepay?
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Offline dealfinder85

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How does it work with the mortgage escrow if you prepay?
could depend on lender, but my lender told me in January (or whichever month you get billed), when they get a bill with $0 balance, they will send me that quarter's escrow money

Offline Deal Guy

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What about medical insurance premiums for 2018? Can you prepay 12 months of 2018 health insurance premiums, so that when you itemize in 2017, you will have 2 years (2017-2018) health insurance premiums on your 2017 itemized deductions?

Offline 4yourinfo

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What about medical insurance premiums for 2018? Can you prepay 12 months of 2018 health insurance premiums, so that when you itemize in 2017, you will have 2 years (2017-2018) health insurance premiums on your 2017 itemized deductions?
I wonder prepaying all these different expenses will trigger a red flag causing an audit on all your taxes....

Offline Deal Guy

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What about medical insurance premiums for 2018? Can you prepay 12 months of 2018 health insurance premiums, so that when you itemize in 2017, you will have 2 years (2017-2018) health insurance premiums on your 2017 itemized deductions?
The question is, is it allowed or not?

Offline Work-for-ur-muny

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I wonder prepaying all these different expenses will trigger a red flag causing an audit on all your taxes....
Why would it?

Offline 4yourinfo

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Why would it?
Doubling your expenses in a bunch of areas mortgage interest/state tax/ employee expenses/health exoenses etc... And you tax bill drops significantly from the prior years I think can cause a serious flag....

Online yelped

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Doubling your expenses in a bunch of areas mortgage interest/state tax/ employee expenses/health exoenses etc... And you tax bill drops significantly from the prior years I think can cause a serious flag....
Why would you say that?

Offline GTR

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Accelerating deductions and deferring income may very well be red flags for an audit - donating to a specific political party has been a red flag in the past.  However, generally there's nothing against the law about what people are discussing here - any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.

Now if you were worried about an audit for other reasons you might consider minimizing any activity that be a flag.