This suggestion is from Needham selectman, former Norfolk County administrator, and attorney Dan Matthews – Dan suggests accelerating the payment of the rest of your FY18 real estate taxes before the end of the calendar year, if you will not get to deduct the full amount in 2018, due to the new federal tax bill (I believe local real estate taxes will only be deductible up to $10,000/year starting in 2018).
Merry Christmas! Happy Holidays!
If a combination of cheery greetings, politics, and tax accounting is too much for one email, please accept my Best Wishes for the Holidays and ignore the rest of this.
But it’s become apparent that as a result of the latest tomfoolery in Washington, almost every Massachusetts homeowner who will itemize deductions for 2017 can save measurably on US income taxes by pre-paying the second half of their FY18 city/town property tax (i.e., the payments that will be due in Feb and May of 18) NOW, before Dec. 31.
Not everyone can swing that on such short notice. If your taxes are paid from mortgage holder escrow, you would have to notify the bank (and still probably have to do the prepay yourself and adjust later). And there are only four business days left in the year. And did we say the Holidays?
But with some exceptions, the dollar amount involved equals approximately the half-year property tax bill times your marginal US tax rate, which should make the effort worthwhile for (tens of?) thousands of people in MA, most who know little if anything about this.
I’m sending this along to friends who may be affected or themselves have friends or family it applies to.
I’m not a tax expert, and everyone’s situation is different- if you have questions, you may want to check with a tax advisor. But this is the basic information as I understand it.
Some cities/towns are posting prepayment information of their websites, and there is likely to be news information about this as well, but the window is short.
If you feel guilty about taking advantage of this break you can:
– consider it part of your patriotic duty to help show how wrong and reckless this new tax law is.
– make an additional donation to the charity of your choice (still deductible!).
I hope this is helpful.Happy Holidays!