Pre-paying your 2018 property taxes is all the frenzy right now. As 2017 is coming to an end, Residents in high-tax states such as California, New York, New Jersey and Maryland are rushing in to their County offices looking to pay their property taxes before the new rules go into effect January 1, 2018. The new tax bill that got signed last week puts a cap on the amount you can deduct for State, Local, and Property Taxes at $10,000. BEWARE that some jurisdictions allow for pre-payments, other counties are scrambling over boulders to work with their Residents who want to pre-pay – although not guaranteed.
Unfortunately our Golden State; California does not allow pre-payment on 2018 property taxes, what we can do is pay our 2nd installment of property taxes for 2017 which is not due until April/2018. If you itemize and pay more than $10,0000 in combined State, Local, and Property Taxes, it makes sense to pay as much of your local tax bill before 2018 hits as the old rule still applies on taking the larger deduction.
Another thought to consider is, now after the Holidays, do you have spare cash to splurge on making payment towards the 2nd installment of taxes for 2017 before the year ends? If it must be charged on a Credit Card, will the interest on Credit Card Triumph your initial savings on paying the 2nd installment now vs. in 4/2018? – If you own a $1,000,000 dollar home + a property tax rate of 1% + at a 25% tax bracket, you can potentially save a little more than $1,000 if you pay your 2nd install of taxes this year instead of next year.