As the GOP tax bill sped toward victory Friday, word spread about a tax plan “life hack” that could save Bay Area residents thousands of dollars if done quickly.
The move is simple: Submit your upcoming property tax payment before the end of the year, instead of waiting until the due date, and you may get a bigger deduction than you will after the tax overhaul goes into effect in 2018.
That idea became especially relevant after the tax plan got support Friday from two Republican leaders who had been on the fence — Sen. Marco Rubio, R-Florida, and Sen. Bob Corker, R-Tennessee — giving the GOP the votes it needs.
Submitting an early property tax payment may not benefit everyone, said Santa Clara County Assessor Larry Stone, but it’s an option worth considering.
“Follow the legislation,” he said. “Talk to your CPA, and don’t do it until, one, the legislation is final, and your CPA advises you that you get a benefit.”
Julie Manaois, chief deputy tax collector for Alameda County, also suggested residents consider filing early.
That’s because the tax overhaul, which appears set to pass next week, will allow people to claim deductions on property taxes and state and local income taxes only up to $10,000. That could mean a significant blow to Bay Area residents, many of whom now write off much more than that.
But pay your property taxes now, before the bill goes into effect, and that payment won’t count toward the cap, tax experts say. Instead, it will be fully deductible this year, assuming you itemize your deductions.
Property taxes are divided into two yearly payments, the second of which is due April 10 in Santa Clara County. But there’s nothing to prevent property owners from turning in the payment early.
The owner of a home assessed at $1 million, for example,
Source:: The Mercury News – Business