In anticipation of the new tax law, some taxpayers are seeking ways to try to minimize their future tax burden. Due to the incoming $10,000 cap on the state and local tax deduction, this includes prepaying 2018’s property taxes for deduction on their 2017 tax return.
On December 27, 2017, NJ Governor Chris Christie issued an executive order allowing NJ homeowners to prepay property taxes for the first two quarters of 2018. While some towns were already accepting prepayments, this order instructs all municipalities to accept at least partial 2018 prepayments from residents. The prepaid property taxes must be postmarked by the end of the year to be eligible for deduction.
See IRS Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017
It is important to note that this strategy may not be beneficial for taxpayers subject to alternative minimum tax. For more guidance, contact your tax advisor to find out the best strategy for your individual situation.
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