Last week, the Trump administration passed the first major tax overhaul since the 1980s. No doubt, the tax reform law will have major implications for millions of Americans. One of the most significant aspects of the new law is how it will affect property tax deductions.
Currently, there is no limit on the amount of local, state and property taxes that homeowners can deduct. That will all change on January 1st. As of 2018, homeowners will have a $10,000 cap on the amount of property taxes that they can deduct. This has prompted many Ohio homeowners to hurriedly pay their property taxes before the end the year in order to maximize their deductions.
Should I pay property taxes early?
In the state of Ohio, citizens pay property taxes in arrears, meaning that taxes for 2017 are actually paid during the 2018 calendar year. Therefore, prepaying property taxes could indeed benefit some Ohio taxpayers—but not all of them. So how should you decide whether to rush and prepay your property taxes? Take a look at this helpful list.
It may benefit you to pay your property taxes early if:
- You live in a county with particularly high property taxes, or your property taxes are over $10,000 a year
- You typically itemize your taxes
- Your county allows residents to prepay their property taxes
- Your income is between $100,000 and $200,000 and is therefore not subject to Alternative Minimum Tax
- You have the cash on hand and can afford to pay early
- You have consulted a financial adviser, tax planner or tax attorney and they have advised you to proceed
