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Last week of year. Considering the new tax plan, should I...
Posted on 12/26/17 at 9:11 pm
Posted on 12/26/17 at 9:11 pm
A. Purchase car? I need to replace my totaled car. I can write off taxes (since I don't have state income tax) and at this late date, business use depreciation?
B. I always pay previous year's property taxes by end of January without penalty. Should I pay them this week and possibly the 2018 taxes, too?
B. I always pay previous year's property taxes by end of January without penalty. Should I pay them this week and possibly the 2018 taxes, too?
Posted on 12/26/17 at 9:20 pm to HubbaBubba
I just got a phone call from a good girl friend in the suburbs of DC. They collected over 1.5M in prepaid property taxes, that ranged from 5K to 250K paid.
Really rich folks are nervous.
Really rich folks are nervous.
Posted on 12/26/17 at 9:48 pm to HubbaBubba
I always pay previous year's property taxes by end of January without penalty. Should I pay them this week and possibly the 2018 taxes, too?
I am looking at doing this. Based on what I read, it is not clear whether the IRS is going to let you deduct 2018 property taxes paid in advance in 2017. I haven't seen a definitive answer on this.
I am looking at doing this. Based on what I read, it is not clear whether the IRS is going to let you deduct 2018 property taxes paid in advance in 2017. I haven't seen a definitive answer on this.
Posted on 12/26/17 at 9:58 pm to HubbaBubba
The property tax deduction will be capped at $10k, so if you pay less then $10k/year in property taxes then you shouldn’t have to worry about it. If you pay more than $10k/year, then you’ll probably want to pay this week. If you pay significantly more than $10k/year, then you may want to call your Tax office this week and try to prepay for 2018.
Posted on 12/27/17 at 3:35 am to TheChosenOne
quote:
The property tax deduction will be capped at $10k, so if you pay less then $10k/year in property taxes then you shouldn’t have to worry about it.
That's not accurate. The new tax plan has a $10k cap for deducting all state and local taxes. So that's state income tax (or sales tax) and property tax combined.
Posted on 12/27/17 at 9:31 am to HubbaBubba
You should definitely pay state income tax before the year end as well (if you want to receive the benefit). Effective next year, this item will also not be deductible
Posted on 12/27/17 at 11:04 am to HubbaBubba
quote:
A. Purchase car? I need to replace my totaled car. I can write off taxes (since I don't have state income tax) and at this late date, business use depreciation?
A) Car depreciation isn't changing much. Are you going to put this vehicle in your business? Keep in mind unreimbursed employee expenses, including mileage or depreciation/actual if you are an employee, are going away in 2018. That means you might want to get a depreciation expense now.
How much in car sales taxes do you think we will have?
quote:
B. I always pay previous year's property taxes by end of January without penalty. Should I pay them this week and possibly the 2018 taxes, too?
B) Yes, if one of the following applies.
i) Your annual sales tax deduction and property tax deduction exceeds $10,000
ii) You will itemize for 2017, but the increase in standard deduction means you will take the standard in 2018.
Posted on 12/27/17 at 11:10 am to SloaneRanger
quote:
Based on what I read, it is not clear whether the IRS is going to let you deduct 2018 property taxes paid in advance in 2017. I haven't seen a definitive answer on this.
If your taxes have been billed and are due in January, this will not be an issue at all. Don't even think about it... just do it.
If your taxes aren't billed until later in the year (for example, New York bills throughout the year) it's a little more hairy.
General deduction rules for cash-basis taxpayers (which 99.9 percent of individuals are) allow for a deduction if an item is paid, provided the benefit of the expense doesn't exceed 12 months from date of payment, provided the expense doesn't run afoul of other parts of the tax code.
For example... there is another code section that deals with advance payment of mortgage interest... so for mortgage interest deductions, that provision supersedes the general rule.
There is no specialized section that deals to otherwise limit the deduction of property taxes.
The problem you will find, at least in Louisiana, is that many parishes are not set up to accept payments 12 months in advance, and it won't work.
Posted on 12/27/17 at 11:33 am to gpburdell
quote:
That's not accurate. The new tax plan has a $10k cap for deducting all state and local taxes. So that's state income tax (or sales tax) and property tax combined.
I should have been more clear. He said he doesn’t pay state income tax, so I just referenced property taxes. I should have also included sales tax, though.
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