Since the standard deduction is being doubled....you don't pay ANY taxes on another $12k you'd previously paid taxes on. THAT alone should make up for the difference.

I always pay my property taxes in full before they're due. Like you said, interest lost isn't worth anything. But.....property taxes are paid in arrears. Next April I'll pay for 2017.

I agree with Nicole. We're no where near the top tax brackets, but our RE taxes are also no where near $10,000 per year. The extra standard deduction should more than offset the non-deductible RE taxes in 2018 for you.

Yes, the bill raises the standard deduction -- then drops it over the next five years, unlike the 'forever' gift to the upper brackets and corporations.

Will we not lose an additional deduction for property tax, $6K in our case?

Does a taxpayer have to choose *either* the increased standard deduction *or* a property tax deduction (up to $10K)?

Yes, your losing a $6K property tax deduction if your property tax is $16k, but your GAINING a $11,300 deduction(your married)....see below, a write off of $10k in taxes. No more itemized deductions. A simplified tax form. Also people with children...get a higher deduction $300 per child. Mortage interest is still deductible up to a $750k home.

Tax changes...Read all about it

Here's a quote:

What's happening to the standard deduction?

That's roughly doubling -- from $6,350 to $12,000 for individuals, and from $12,700 to $24,000 for married couples filing jointly.

Can I still deduct my state and local taxes?

Up to a point, and you'll have to make a choice. Filers will be able to write off the cost of state and local taxes, up to $10,000. And they must choose from among sales, income and property taxes for the deduction, instead of being able to deduct all local taxes.

Of course this "gift" is going to add about one and a half TRILLION dollars to the national debt over the next twenty years. I won't see it, but my grandchildren and their children will. The "gift" that keeps on giving, er, TAKING.

When is it ALL going away? Let's just deal with what's going on "now".

No............your not seeing the whole picture. Cuts are being made elsewhere. ie: Government spending is being reigned in. The Obama contract for 4 Airforce One planes costing billions was cancelled. New bids are being taken for the 2 new planes. The list goes on and on....

Each president gets to deal with what the last one left him. That's how it is.

At the end of FY 2018 the gross US federal government debt is estimated to be$21.09 trillion, according to the FY19 Federal Budge

I wasn't clear. We would pre-pay $6K on our *2017* RE tax bill that is *due* in 2018. We will still get the full $16,000 deduction when we pay our 2017 income taxes.

Thanks for the link, nicole. Now I see the further 'spoonful of sugar' that will make voters happy instantly: Less will be withheld from their salaries, starting in January. It will take a while for the *temporary* nature of these 'windfall' deductions to register with the public. That recognition should gradually increase -- along with the climbing federal deficit.

If you want to believe the federal budget is getting a massive trimming, look at where the cuts are being made. It's not the Defense Department (who order those ridiculous airplanes in the first place). It's Health and Human Services and Education. It's gutting Justice.

ie: Local governments control the salaries of educators. You vote to raise taxes to pay more for their salaries....you know this...right?

Someone was saying last night that at some point in the reconciliation of the House and Senate version of the bill, someone "snuck" in a provision that directly benefits Sen. Bob Corker's family. He reportedly had been opposing the whole tax bill, but then switched to supporting it. We someone questioned him whether he changed his mind based on the new provision that benefits him. His response was he didn't read the bill closely enough and didn't even realize it was there.

Don't forget that they haven't funded CHIP, which covers health insurance for 9 million children. Tax breaks for billionaires is more important than the health of children.

I have no doubt Trump is trying to "deal" with what Obama left him. He has a lot more to work with than Obama did in 2008, and as far as I'm concerned, all this recent economic growth was put in place by Obama. Trump is doing everything he can to make himself look good, at least temporarily, with no regard to the long-term implications. I hope he loses in 2020 before too much damage happens.

Chi, I don't think Trump will last till 2020 to even be on the ballot. He will either resign, be impeached, or drop dead (his health is obviously failing).

As for prepaying real estate taxes -- here in Sacramento County, CA, you cannot make partial payments. Your annual tax bill is divided into two installments, with the first part being due on November 1st (delinquent if not paid or postmarked by 5:00 pm on December 10th). The second installment is due February 1st and is delinquent if not paid or postmarked by 5:00 pm on April 10th. You can pay the entire liability at once (before December 10th), or you can pay in the two equal installments. But the County will not accept a payment in an amount that is not either one-half of the total liability, or the total amount.

chisue, whether or not you can "prepay" depends on when the property tax is imposed as a liability affixed to the property (becomes a lien). It usually isn't affected by when payment is due. I don't know the mechanics of for Illinois or Hawaii.

Almost but not quite, lindsey. I believe all of California is the same in that property tax becomes a lien on the property Jan 1 and payment is due in two pieces, before 12/10 and then before 4/10 of the next year. You can actually pay either or both pieces whenever you want but a 10 % penalty is imposed if either half misses the deadlines you mention. Interest starts July 1 of the second year if still unpaid by then, 2.5 months after when the April 10th half is due. Long way around to say - you can pay your April 10th bill, avoid the extra penalty charge, and deduct it anytime from October (in the year of the lien) when the statements are received until April of the following year.

Hi all,

It is with reluctance that I become part of the grammar police ... but ... with regard to

"Government spending is being reigned in."

"Reigning" is what kings (or dictators) do - when one wants a horse, etc. to slow down, one "reins" (usually him) in.

Being a renter, I don't pay property taxes ... well, not directly: but the story I've heard is that in a number of jurisdictions, the mill rate (percentage of the estimated value of the property that is charged as tax) is higher on rental property than on the owner-occupied kind.

Not being a resident of the U.S. makes me even further removed from this issue.

ole joyful

The limitation on the state/local tax deduction is a pandering to conservative voters in red states and a face slap for Dems and moderates in blue states where taxes (and incomes) are generally much higher. I think this provision may be among the first things repealed when power shifts in Washington in the next few years.

To put it in context, the median home price in San Jose is $934,000. That's median, not average - average is most certainly higher. With a 1.25% property tax rate for new buyers, the $10,000 state tax deduction is used up before considering state income taxes paid (for which we pay high rates).

Yeah, it's definitely no coincidence that the highest property tax and state tax states tend to be blue. Taking those deductions away penalizes individuals in those states. Politicians aren't stupid - they know exactly what they're doing. Their base will be thrilled and, if my uncle is any indication, they like it when the liberals/snowflakes are upset. :)

Our accountant says, "Never mind," about pre-paying our RE taxes for next year. Oh well...another cockamamie idea from the little woman in our household.

Should I try to learn Chinese (Federal Debt) or another language?

Thanks, all.

BTW, the average property tax in my county, north of Chicago, is $8828, according to the Chicago Tribune Business section story on the tax bill that prompted me to post . This year we paid a total of $1600 (rounded) in two installments, June and September. Our town has highly rated schools and services. It also has a good percentage of *truly wealthy* residents who pay RE taxes close to $100,000 annually. (They send their children to private school anyway!)

Chi....you just said,"It's horrible. It's clearly a big tax benefit to the wealthy ".....

It evens out. The rich(6 figures) pay a little less tax on their base income, but a TON more in property tax /that's not deductible & fewer deductions overall that are NOT allowed.

chisue, why did he say not to bother? As someone who receives and answers questions like this, I don't consider that to be a good answer.

Nicole, it doesn't even out. For rather wealthy people, it's a comparison of pennies (loss of deduction) to dollars (income tax savings). For solid middle class folks with income from white collar jobs or business ownership, it's a comparison of pennies (tax savings, if any) to dollars (lost deduction for state taxes) in the opposite direction.

Nicole, by wealthy I meant more the people who own these corporations who are going to see much bigger profits with their tax rate reduced in half. I don't see them giving across-the-board raises to everyone, and sure, they might invest some in company growth, but profits tend to stay with the stake holders.

It's impossible to claim that rich people will even out. Not all wealthy people have massive property taxes, or live in high tax states. Look at Warren Buffet. I imagine he'll benefit greatly between his modest house/state, businesses and personal wealth.

We're in a high income bracket, in a high property/state tax area, and from our calculations, we will be saving quite a bit of money with this plan. We don't need to be saving money, especially when they are cutting things like CHIP.

Chi....people earning $480K and over..... the tax bracket didn't change. IT'S THE EXACT SAME, with fewer deductions. Being wealthy does NOT give you insider trading info....sorry. :0)

Corporations need to bring jobs back to America......with penalties if they don't. It's a wait and see how this goes.

Chisue has her tax question answered...by her own expert. lol

.....see ya on the forums....

Nicole, what do you mean? The highest tax bracket is being lowered from 39.6% to 37%. That's nearly 3% savings. Not to mention saving money on each bracket to the $500k.

I don't understand your insider info comment - it sounds a bit condescending. I'm going by my research but if you have different information, I'd be happy to look at it. I am far from a tax expert.

Here'e the tax rate chart: Link

If anyone wants to take a look....here it is. From The New York Times. Ya know....the new tax plan hasn't passed. It's all speculation at the moment.

Nicole, I fear you are beating a dead horse. Those against Trump will never agree to support anything under his term of office. Those for him are basically happy with the outcome so far. It is what it is.

That is old, from early November. They have changed it.

https://www.forbes.com/sites/robertberger/2017/12/17/the-new-2018-federal-income-tax-brackets-rates/

https://nytimes.com/2017/12/16/business/the-winners-and-losers-in-the-tax-bill.html

A few times in my past working life, I did find a small advantage in making double payments of RE taxes in one year and then taking the standard deduction in alternating years. That only works if two tax payments is greater than your standard deduction. Instead of paying taxes in December when the bill is issued, pay it in January and then pay again at the end of the year before December 31st.

Example: Instead of paying taxes in 1999, pay it in Jan. 2000 and use standard deductions for 1999 income tax. Pay the RE tax in Dec. 2000 and now you may use two RE tax payments as deductions in 2000. You do not pay any RE tax the following year (2001). In 2002, repeat the cycle and pay twice that year.

I found this procedure was not much advantage for my case and only did it once. It was a pain keeping track. I had to mark my calendar a year in advance to keep the record straight, and as my kids began to leave the house, I needed to simplify my records and tax procedures. Now, I pay the RE tax in December and close my books on Dec. 31.

Chi, use the money you save on taxes to make generous donations to schools, hospitals, poor families, etc. That's the best way to get back at the government for giving you a tax break.

Those who are upset about the decrease they will be receiving are welcome to make payments directly to the Treasury Department, to be applied to the national debt. Checks made payable to "Bureau of the Fiscal Service" can be sent to: Bureau of the Fiscal Service, Attn: Dept G, P.O. Box 2188, Parkersburg, WV 26106-2188. You can also enclose the check with your income tax return when you file. In the memo section of the check, make a note that it is a gift to reduce the debt held by the public. For information on how to make this type of gift online, go to www.treasurydirect.gov and click on "How To Make a Contribution to Reduce the Debt."

Inasmuch as most, if not all, lawmakers who voted against the tax cut are in the upper tax brackets, I am sure they will all make gifts to the Treasury in the amount of their reduced tax liability.

I will be using my tax refund to help offset my costs from Obamacare.

I don't want to pay higher taxes - that's not what I was saying. I think taxes are already too high for what we get for them. However, I do not believe the answer is tax cuts WHILE they are de-funding important programs. Cutting down our defense spending and giving a tax cut? I'm all for that.

Good idea Brushworks. Maybe I can help out some of those poor kids who might lose health insurance next month. It has nothing to do with "getting back" at the government (though I note your sarcasm) but rather trying to think of people besides myself.

wanda, do you have a suggestion about what I should do with my tax increase?

I'm oh so happy to continue contributing to other states. The "new" standard deduction is worse than my itemized deductions. Those of you who will receive a true decrease, enjoy, it will only last for the next 7 years (the cuts are due to expire in 2025). The tax tables aren't the whole story.

It seems clear to me that in the short term it will generate a lot of work. For CPAs and tax lawyers and the like as those who have been in the 39% bracket scramble to set up sham corporations that will be considered as earning that money, so that they will effectively end up paying the 20% corporate rate on their millions in income instead of the 37% they would otherwise owe.

Backing up a little bit - since the subject of the original post was prepaying real estate taxes - I wrote earlier, "As for prepaying real estate taxes -- here in Sacramento County, CA, you cannot make partial payments. Your annual tax bill is divided into two installments, with the first part being due on November 1st (delinquent if not paid or postmarked by 5:00 pm on December 10th). The second installment is due February 1st and is delinquent if not paid or postmarked by 5:00 pm on April 10th. You can pay the entire liability at once (before December 10th), or you can pay in the two equal installments. But the County will not accept a payment in an amount that is not either one-half of the total liability, or the total amount."

Then Elmer piped in with, in part: "Almost but not quite, lindsey. I believe all of California is the same in that property tax becomes a lien on the property Jan 1 and payment is due in two pieces, before 12/10 and then before 4/10 of the next year. You can actually pay either or both pieces whenever you want but a 10 % penalty is imposed if either half misses the deadlines you mention. Interest starts July 1 of the second year if still unpaid by then, 2.5 months after when the April 10th half is due. Long way around to say - you can pay your April 10th bill, avoid the extra penalty charge, and deduct it anytime from October (in the year of the lien) when the statements are received until April of the following year."

Ah, Elmer -- you always like to make things more difficult and complicated than they need to be. Interest on any unpaid property tax liability wasn't part of the discussion when the discussion is prepaying the taxes.

Yes, in Sacramento County we can pay both halves of the property tax bill whenever we want, but we don't know what our tax liability is until at least October of each year. And since the County will not accept a payment that is not either (1) one-half of the total liability or (2) the entire liability, just how do you propose making a payment when you don't know what you owe?

What you said,

"You can pay the entire liability at once (before December 10th)"

Is not correct. That was why I commented.

You can pay your entire liability whenever you want. You can pay the second installment (otherwise due in April) on 12/31 if you want, or any other time. Not just before Dec 10th.

For people who normally make two disbursements for their property taxes, just before the payment deadlines, sending a check in December to pay the April instalment IS a prepayment.

Time and time and time again the Republican fantasy of trickle-down economics has been tried. Every time they make up numbers and made wild conjectures and speculations about how cutting taxes on the wealthy will create more business and and create more jobs and grow the economy and increase the tax revenues received. And every single time it has proven to be not the case. What happens instead is the wealthy take their massive tax cut, stack up ever more wealth which they use to buy larger yachts and private islands and more gullible, pliant Republican politicians to bestow even more largess. Meanwhile the companies continue to ship jobs overseas, the government whittles away at the "safety net", the middle class slides ever closer to extinction, the federal debt grows ever larger, and the Republican faithful continue to believe the lies they're told instead of the facts right in front of them, and they keep voting for the same weasels who keep spouting the same nonsense.

Over the past five years Kansas decided to embrace the same trickle-down fantasy and slashed taxes, and went from a solvent, well-run state to one teetering on the edge of bankruptcy. Its neighbor Oklahoma saw that and decided they'd try the same thing, and had the same result.

Maybe I can help out some of those poor kids who might lose health insurance next month.

Are you referring to CHIP? Mark this down, CHIP will continue as usual. Just like the government won't shut down. Game players.

I love this place. I learn so much.

What happened to the Republic (a government, not reliant on whims of charity) that was OF the People, BY the people, FOR the people?

Chisue, i’m in your state as well. All of our property taxes are paid 1 yr behind. So what you pay next year is for 2017. Secondly, the federal changes are that state income tax + property taxes are limited to 10,000 per person.

I’d say check with an accountant about prepaying because by doing so, you may end up triggering AMT in either year.

I haven't read through all the posts. I live in PA if that makes a difference. Here is an email I got from my financial advisor today. I plan to pre-pay double the amount due in hopes of offsetting some of next year's loss:

"Congress has just passed a major overhaul of the Federal Tax Code. Most of the changes begin on January 1, 2018.

We are writing to urge you to take advantage of a short window of opportunity regarding payment of STATE income taxes.

The
new law will limit the amount of the federal deduction of state and
local tax payments (SALT) to $10,000. The ability to deduct the full
amount paid in state and local taxes will no longer be available.

We are strongly recommending
that you pay the quarterly estimated state payment
(technically due January 16, 2018) before the end of December 2017 to
ensure that this deduction is reflected on your 2017 federal tax
returns."

Yep, Dedtired, we are paying our state estimates, due Jan. 15, 2018, before year end. Actually, we've done that often in the past, making an educated guess on which year would be most advantageous, because our income, particularly our farm income, fluctuates year to year. This year though is a no-brainer, with the new SALT limits.

It's not a no-brainer as mojomom suggests. Only by doing two 2017 federal tax projections, one with a state tax payment acceleration (of state income and property tax, most typically) and one without, can one be sure if accelerating state tax payments produce a federal tax savings.

I think the most common reason why acceleration isn't a benefit is because many people are always subject to the alternative minimum tax. I am. In other cases, the prepayment can trigger it and limit or even eliminate the benefit. It's not an all or nothing proposition. Some may have benefit from SOME of the prepayment, maybe a lot, and maybe not much at all. Who and why can't be generalized, it depends on what income and what deductions, and how much of which, will be in one's 2017 return

We've always paid State and Federal Estimated Income Taxes (due in January) in December.

We just tipped into the AMT on 2016 filings. I'm guessing this is the factor behind our accountant saying that paying RE taxes in advance would be 'a wash'. (I didn't speak with him; DH did.)

Aside: I'm wondering how these tax law changes will affect tax-free investments in the future?

chisue, there's no reason to make your federal estimated tax payments even a day before the due date unless you've underpaid your estimates previously and want to stop the running of the underpayment penalty. If your estimates are adequate to meet one of the safe havens that avoid underpayment penalty, keep your money in the bank earning whatever paltry rate it earns and make the payment just before it's due.

If you're required to pay electronically as are many taxpayers using the EFTPS system (I am), you need to trigger the payment two days before it's due. If you do it enough in advance, you can hit the due date or day before exactly.

OK...

We moved from Illinois to Florida for several reasons (first - the weather in winter). But we have a house that is almost the same square footage in Florida as we had 'up north'.

Property taxes went from almost $5K to less than $1K. AND, there is no income tax in Florida.

I gotta tell you though, that I own a buncha farm land in Illinois and taking a standard deduction isn't an option.

However, the money that we don't spend on taxes goes to helping us pay for cruises. Just returned from a 14-day relaxation period and ready to resume being the curmudgeon I have been for years.

Some people are drawn to lower tax jurisdictions for that very reason, some aren't. If it works for you, jim, that's all that matters. Personally, neither Florida nor many of the other lower tax jurisdictions (I think of Nevada and Texas in this way) entice me any. I pay the fare for where I want to be as many others do.

Would love to pay our property taxes now for next year, but our county's office isn't set up to process them. Ditto for surrounding jurisdictions. This bill was passed in such a hurry, few places have had a chance to gear up in preparation for the payment changes.

Nicole said early on in this thread:

Mortgage interest is still deductible up to a $750k home.

I don't understand that. Who or how is it decided what a home is worth? I cannot imagine how this works. Would that be per property or cumulative?

The limitation on the mortgage interest deduction has been around for a long time, maybe a few decades or more. This isn't a new rule, it's a change to an old one.

Until this change, deductions were limited for interest paid for an aggregate loan balance of $1 million (for a personal residence plus vacation house). They wanted to reduce the amount of interest deductions taken (that "tax increase" offsets tax cuts in other areas) so the loan amount max was reduced from $1 million to $750K. It's not the value of the house, it's the amount of the loan. (Yeah, I know, there's an indirect relationship but it's the loan amount that matters).

Well if you live in Washington state you can not prepay. That was on the news last night, as the state law says you may not.

The property tax cycle in Washington, as per what I found, has a first half paid in April, a second half paid in October. So as of now, for example, nothing remains due. By contrast, in California (as explained above), half of the tax for the assessment year is unpaid as of right now so that a payment now isn't really a prepayment, just an earlier than required payment for a tax has been billed already and is legally a lien on the property.

The cycles vary from place to place.