Hi! Hope you’re having a wonderful holiday season! I wanted to pass along end-of-year information about pre-paying your 2017 property taxes, particularly in light of the proposed changes in the 2018 tax bill.
Under the new tax bill, the deduction for real estate taxes and state and local income taxes will likely be capped at $10,000 beginning in 2018. From CPAs I’ve spoken with, there are actions recommended for individuals now –in 2017– before end of year.
If your real estate taxes and state and local taxes exceed $10,000 and you are not subject to the alternative minimum tax (check your 2016 Form 1040, line 45, if there is an amount then you are subject to the alternative minimum tax and do not need to take action), CPAs are recommending the following:
- Pre-pay in 2017 your real estate taxes due in 2018
- If you have a fourth quarter estimated tax payment to make to a State pay it in 2017 rather than 2018.
For information about pre-paying your property tax in Illinois, see this guide from the Chicago Association of Realtors, including paying online or in person at Chase Bank.
You’ll need to act quick to take advantage of potential tax savings. Contact me with any questions, or if I can help with any upcoming real estate needs in 2018.
Happy New Year!
NOTE: As your realtor, I am not providing any tax advice. I urge you to seek out a Certified Public Accountant or tax professional. If you’d like a referral to a Chicago-based CPA, let me know and I’d be happy to connect you!