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Live in Cook County?
Topic Started: Dec 21 2017, 06:13 AM (122 Views)
John Galt
Fulla-Carp
You can prepay your first half 2017 property tax before the end of December and deduct it from this year's taxes (if you itemize).

Treasurer has the bills ready and you can download them here:

https://cookcountytreasurer.com/
Let us begin anew, remembering on both sides that civility is not a sign of weakness.
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George K
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Finally
Done.
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- Mik, 6/14/08


Nothing is as effective as homeopathy.

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Copper
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Shortstop

Did you see the story yesterday that said that many people who did this can't. They misunderstood the law and they can't really deduct the paid-in-advance property tax?

The Confederate soldier was peculiar in that he was ever ready to fight, but never ready to submit to the routine duty and discipline of the camp or the march. The soldiers were determined to be soldiers after their own notions, and do their duty, for the love of it, as they thought best. Carlton McCarthy
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George K
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Finally
Copper
Dec 29 2017, 09:05 AM
Did you see the story yesterday that said that many people who did this can't. They misunderstood the law and they can't really deduct the paid-in-advance property tax?

My understanding is that it's deductible if:

1) Property has been assessed for 2017 (mine has)
2) Bill is available (it is)
3) Payment is made in 2017 (I did)
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"Now look here, you Baltic gas passer... "
- Mik, 6/14/08


Nothing is as effective as homeopathy.

I'd rather listen to an hour of Abba than an hour of The Beatles.
- Klaus, 4/29/18
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Copper
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Shortstop

That sounds right.

From the IRS 2 days ago

https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-assessed-and-paid-in-2017

Quote:
 
WASHINGTON - The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.

The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.

The following examples illustrate these points.

Example 1: Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018. On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a deduction for this prepayment on the taxpayer’s 2017 return.

Example 2: County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017 – June 30, 2018. County B intends to make the usual assessment in July 2018 for the period July 1, 2018 – June 30, 2019. However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018.

The IRS reminds taxpayers that a number of provisions remain available this week that could affect 2017 tax bills. Time remains to make charitable donations. See IR-17-191 for more information. The deadline to make contributions for individual retirement accounts - which can be used by some taxpayers on 2017 tax returns - is the April 2018 tax deadline.

IRS.gov has more information on these and other provisions to help taxpayers prepare for the upcoming filing season.
The Confederate soldier was peculiar in that he was ever ready to fight, but never ready to submit to the routine duty and discipline of the camp or the march. The soldiers were determined to be soldiers after their own notions, and do their duty, for the love of it, as they thought best. Carlton McCarthy
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George K
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Finally
My timing on this is pretty good considering the new tax law's restrictions on deductibility of real estate taxes.

In 2017

1) I paid real estate taxes on the condo
2) I paid 2016 real estate taxes on the Cheddarshack®
3) I sold the Cheddarshack® and paid real estate taxes through the middle of November 2017
4) I paid the first installment of the real estate taxes on the condo.

Numbers 2,3, and 4 would have been not deductible because of the threshold.
A guide to GKSR: Click

"Now look here, you Baltic gas passer... "
- Mik, 6/14/08


Nothing is as effective as homeopathy.

I'd rather listen to an hour of Abba than an hour of The Beatles.
- Klaus, 4/29/18
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jon-nyc
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Cheers
Copper
Dec 29 2017, 09:05 AM
Did you see the story yesterday that said that many people who did this can't. They misunderstood the law and they can't really deduct the paid-in-advance property tax?

Well, no one has done it yet. You can’t deduct things until you file.

The down side of paying your real estate taxes a month or two early is negligible.
In my defense, I was left unsupervised.
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Copper
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Shortstop

They paid their property taxes early.

As this article points out, some shouldn't: https://www.forbes.com/sites/kateashford/2017/12/28/property-taxes/#3a77dd905513
The Confederate soldier was peculiar in that he was ever ready to fight, but never ready to submit to the routine duty and discipline of the camp or the march. The soldiers were determined to be soldiers after their own notions, and do their duty, for the love of it, as they thought best. Carlton McCarthy
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John Galt
Fulla-Carp
Yea, I think George is right about prepaying; our county treasurer agrees.

The bill is not an estimated one; in Cook County the first installment is 55% of the previous year's taxes, and is normally due March 1. The second installment bill comes in late June/early July and is due August 1, and that final amount is based on the current year's levies from the various taxing bodies.

As jon said, at worst we're paying three months early and if we can't take it as a deduction on our 2017 federal return, then "oh, well".

We also prepaid our taxes on our Cheddarhut®. For our county, that bill always arrives in early December, and you can pay the entire bill, or split it into two installments due by January 31 and July 31. We paid the whole thing in December for 2017's taxes, and had done the January/July payments this year for the 2016 taxes. So we have two years of Cheddartaxes and a year and a half of Illinois (don't prounounce the 's') taxes to deduct.

P*D said something interesting about what might happen in the future with respect to itemizing:

Quote:
 
Here's an interesting phenomenon we may observe over time. I'll call it oscillating itemization! It may make sense for many upper middle income people (not the 1%) to itemize every other year. Throw all the major charitable gifts and RE taxes into year one, and itemize. In the following year, take the standard deduction. In year three, back to bundling and itemization. Rinse, wash, and repeat.


This whole thing is a cluster****, though. Should have been more guidance and clarification ahead of time. It's left a lot of people and government entities in a lurch trying to figure out what to do.
Edited by John Galt, Dec 29 2017, 12:44 PM.
Let us begin anew, remembering on both sides that civility is not a sign of weakness.
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Larry
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Mmmmmmm, pie!
Am I the only one who thinks there's something bad wrong when we get to a point that we have to plan out when we pay one tax in order to get a discount on another tax.....
Of the Pokatwat Tribe

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Larry
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Mmmmmmm, pie!
Quote:
 
This whole thing is a cluster****, though


I thought you liberals lived paying taxes? Just do your patriotic duty and pay the way that will cost you the most. Live your values!
Of the Pokatwat Tribe

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