I mentioned this in a recent blog post, but it’s now been officially sanctioned by the IRS, so it bears repeating. If you have property taxes that would usually be due in 2018, which are assessed and paid before 2017 year-end, then you can deduct them on your Schedule A with the rest of your property taxes for 2017 as an itemized deduction.
This may be important for those that:
- will no longer itemize starting in 2018, because the new standard deduction is higher than their combined allowable itemized deductions; or
- who will continue to itemize in 2018, but will find themselves affected by the new $10,000 cap on deductible property + state income tax.
But caution: there are situations where the pre-payment deduction will not hold up — as this NYT article does a good job of outlining.
More here, direct from the IRS: IRS Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017 | Internal Revenue Service