RALEIGH, N.C. (WNCN) — Around the Triangle, county revenue departments are seeing folks coming in this week to prepay their 2018 property taxes.
This unusual step is taking place because the new tax bill signed by President Trump puts a limit on the amount of state and local taxes people can deduct, but the IRS is cautioning taxpayers about making the prepayments to get a deduction in 2017.
Among those waiting in line to pay taxes at the Wake County Revenue Department office in Raleigh Thursday morning were some people like Anand Selvares who were coughing up cash to pay off their 2018 property taxes.
“I want to prepay so I can save some money,” he said.
And he’s not alone.
Ever since Trump signed the new tax bill into law, Wake County has seen a surge in those who are hoping to deduct their 2018 property taxes in 2017.
“We’ve had close to 400 prepayments in the month of December so far,” said Wake County Revenue Director Marcus Kinrade.
The new tax law places a $10,000 dollar cap on the amount of state and local taxes you can deduct from your federal tax bill. But, what people are prepaying right now in Wake County are not their actual 2018 taxes.
“It’s important to note these are estimated taxes,’’ says Kinrade. “The assessment has not been set nor will it be until 2018.”
And that, says the IRS, is key.
An advisory on its website says “a prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible.”
However, the same notice says if the prepaid taxes for 2018 were already assessed in 2017, they may be deductible in 2017.
Jonathan Parker prepaid his 2018 taxes and told CBS North Carolina he was unaware of the IRS notice. Even so, he said, he hopes things could change.
“I think it’ll be deductible. I’m hoping so,” Parker said.
Parker is getting married soon and says the 2017 deduction on his 2018 property taxes would be worth about $400 to him.
That IRS notice was enough to convince Doug Brown not to pay in advance.
“You probably won’t be able to deduct the taxes if you pay them early this year, so it won’t do any good from a tax perspective to do it that way,’’ he said.
Others say, they’ll take a chance with an early payment hoping the IRS changes its mind.
“It may work or may not. It all depends,” says Selvares.
If you do decide to pay in advance, it has to be in person. You can’t prepay online.
And you have to pay by cash or check — county revenue departments won’t accept a credit card or an online payment for 2018 property taxes.
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