It’s not going to matter for many with the $25k standard deduction in 2018.
Well, yes. That’s the point of this exercise. For the 20% of taxpayers who used to itemize, but no longer can/need to, then taking the 2018 deduction in 2017 is having your cake and eating it too.
It all depends on your overall tax situation as I noted above, but for many, it should not be looked at as “I am no longer able to deduct xxxx” but instead “I no longer need to explicitly deduct xxxx”.
1 Like
Without knowing that person’s overall tax situation, it wouldn’t be fair to call that hyperbole.[/quote]
He said they have been itemizing for more than 20 years and he ran the calculations under the new law. His results mirror what many tax experts have expressed.
At least the representative wasn’t clueless. A local news article said that people in my county have been lined up all week prepaying property taxes. The head of the office has no idea if any of the people prepaying will be able to benefit from it. Well, shouldn’t he? They always assess in arrears. Bills for 2017 haven’t even gone out yet!
Hi,
I paid mortgage payment due on 1st jan. This transaction has effective date as 12/25/17 and applied to date as 01/01/18. Which date they will use to report my interest payment for tax calculation. Lender also generated next payment with 02/01/18 as due date. Wondering if i can pay this one as well if they are going to consider effective date for calculating interest paid.
Thanks
Did you mean to say 2018? For most, it’s pretty certain assessment/bills for tax year 2017 have happened. In my county, the assessment/billing for 2017 happens in July, 2017 with due date of 9/1/17, and past due of 1/5/18. But this topic is totally a state/local thing, so what is true for me may not be true for you. The IRS advisory illustrates two different scenarios, with one scenario allowing the prepayment deduction.
I’ve seen some alleged tax experts say that the IRS advisory is not necessarily the last word on this topic, If I could claw back the prepayment I made earlier this week, I probably would since it seems unlikely the stance will change. However, I am still going to be watching between now and filing time to see if things do change.__
They should report your January 1st payment under interest paid for 2017. You can’t deduct your Feb payment though, even if you pay it in advance. (This only works for January, because the January interest payment cover interest that accrued in December.)
No, as odd as that sounds. In January, bills go out for the first half of the prior year. In June, bills go out for the second half of the prior year.
Our real estate tax bill for the first half of 2016 was sent in January 2017, due 02/17/2017. Second half of 2016 was sent in June 2017, due 07/14/2017. It’s been that way for the 21+ years we’ve lived here. That’s why I think there’s not much excuse for the county office to be collecting all these prepayments this week and claiming ignorance of whether they’re going to be deductible. 2018 assessments won’t go out until 2019!
This also creates confusion sometimes when property taxes go up because of levies passing. The time lag between the voting and the increases showing up in the bills usually prompts an article in the local news to remind people that the increase was voted in a couple of years earlier.
What you’re describing sounds a lot more sensible.
Is that accurate? Since the mortgage payment is typically due the last day of the month, isn’t the interest paid for interest accrued that month?
Most people have a mortgage payment that’s due the first day of the next month. Or, at least, most people pay their mortgage in the first week of the next month.
Thanks for information. I guess, there is no use of paying mortgage payment due on 02/01/2018.
Thanks
My payment is due on 1st of every month. I paid 2 payments in this month. One is due on 12/01/2017 and other one is due on 01/01/2018. They updated my account with new bill with due on 02/01/2018.
[quote=“gwraigty, post:44, topic:2396, full:true”]
At least the representative wasn’t clueless. A local news article said that people in my county have been lined up all week prepaying property taxes. The head of the office has no idea if any of the people prepaying will be able to benefit from it. Well, shouldn’t he? They always assess in arrears. Bills for 2017 haven’t even gone out yet![/quote]
Looks like a lot of people in your county will have a heck of a New Years hangover when they discover their prepayments are not deductible because there’s yet to be an assessment. As many tax experts stated from the getgo, just because [insert applicable government entity here] accepts your money, doesn’t mean it will be deductible.
As to the head of your county office, unfortunately the Peter Principle is alive and well, here and there, at all levels of government.
1 Like
You are correct. I assumed the 31st, but it is in fact the 1st. Moved my payment up two days.
I should have closed my car deal. Now going to wait for some time.
Thanks