Pre-Pay Taxes for 2018?

[timm]

So -

Since the tax law in 2018 will give a standard deduction of 24K - and depending on your situation - that could cover your deductions today....You may not itemize for 2018.... So, real estate taxes is a large chunk of that deduction....

I am not tax advisor - but, it would seem that it might benefit one to pre-pay taxes for 2018 - right now before the year ends... Has anyone heard any differently?

My tax advisor has suggested that I do it... as has my brother's...

Thanks Tim.

 

[Rich]

Wish I could help you, timm. But I haven’t heard anything about this from my tax advisor. I suspect because property taxes are so cheap in my State that there is little benefit to us doing this sort of thing. Then again, we tend to pay our tax bill quarterly so maybe that plays into it. I have no clue. I slept through my tax law class. Absolutely hate that dry, boring stuff.

 

[timm]

Well I figured I'd throw this tidbit out there in case someone hasn't thought about it. I believe I will be able to deduct next years taxes on this years return since I paid for them in 2017. Then next year will take the 24k standard deduction. It seems like a winner.

 

[Brad225]

I asked my CPA wife and she said as long as you itemize for 2017 and have the money making less than you will end up saving then yes.

She also said that the IRS may disallow the deduction since you don't owe anything for 2018 yet. If it is disallowed you would owe interest on the amount of taxes you didn't pay for 2017 and possibly a penalty depending on the amount of taxes owed.

Good luck.

 

[timm]

Right. Thanks brad. So basically I don't think anyone really knows. I think realistically it is probably a loop hole in retrospect they'd like to close with fairly vague statements. I expect nothing less from the IRS. .