Can you save a lot of money by prepaying your property taxes? Key questions and answers.
This story has been updated with new details about Internal Revenue Service guidance on prepaying property taxes and other changes to clarify how people should think about the property tax deduction.
On Wednesday evening, the Internal Revenue Service released guidance on who can prepay 2018 property taxes, saying taxpayers could do so only limited circumstances: If the local tax authority has already told a taxpayer how much they owe in property taxes for 2018, and if the taxpayer makes payment on what they owe before the end of the year. The guidance came after people around America had already rushed to prepay property taxes in hopes of taking full advantage of the property tax deduction one last time before the new Republican tax bill, signed into law last week by President Trump, takes effect Jan. 1. The bill limits the value of the deduction.
Many taxpayers remain confused about whether they are eligible and how they can take advantage of the tax break. Here are some basic questions and answers about what’s going on — with the caveat that every taxpayer’s situation is different and, if possible, it’s best to consult a tax professional who can assess your circumstances.