Property taxes paid in advance may be deductible if they are assessed and paid in 2017

January 31, 2018

The Internal Revenue Service (IRS) today reported tax professionals and taxpayers who pay property tax, state and local 2018 - in 2017, could be deductible under certain circumstances.


The IRS has received numerous questions from the tax community related to the deduction of property taxes. In general, if a taxpayer can receive a deduction if paid in advance state or local property taxes in 2017, depends on whether the taxpayer makes payment in 2017 and property taxes are assessed prior to 2018. Payment advance of property taxes that were not evaluated, are not deductible in 2017. state and local laws determine if and when a property is assessed, usually when a taxpayer becomes liable for tax on property.



The following examples illustrate these points:


Example 1: Suppose the county assesses the property on July the first period July 2017 to -30 June 2018. On 31 July 2017, the county sent a notice to residents assessment and an invoice that collects property taxes in two installments - the first payment deadline of 30 September 2017 and the second payment deadline of 30 January 2018. Assuming that the taxpayer made his first 2017 payment, the taxpayer can choose to make your second payment on December 31, 2017, so you can claim the tax deduction on the 2017 statement.


Example 2: The County B also evaluates and sends the bill to its residents on July by property taxes the first period July 2017 to 30 June 2018. The intention County B is to make its usual assessment in July 2018 for the first period July 2018 to 30 June 2019. However, because county residents want to pay in advance their property taxes in 2018-2019 -in 2017 County B it has adjusted its computer systems to accept prepayment of property taxes for tax year 2018-2019. Those taxpayers who pay their property taxes for 2018-2019 in 2017, no advance payment may deduct on your federal return because the county did not assess property taxes for tax year 2018-2019 until the first of July 2018 .

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