By now it’s too late to do anything about it, but apparently there was something of a scramble last week as people who think they will be negatively affected by the new limitation on the deductibility of state and local taxes hurried to prepay their property taxes before the new limitation took effect.
I say that it’s people who think they will be negatively affected because, as I have explained already, the dramatic increase in the standard deduction will mean that at least some taxpayers who previously itemized deductions will no longer get any benefit from doing so. You only get a benefit from the deduction for state and local taxes if you itemize, of course.
I suppose that if your property taxes are high enough to be affected by the new limit on the state and local tax deduction ($10,000) and you have a mortgage, chances are that between your deductible mortgage interest and your property taxes, your itemized deductions will exceed the standard deduction. But if you don’t have a mortgage, you may not have enough in itemized deductions to exceed the new, higher standard deduction ($24,000 for married filing jointly, $12,000 for single filers).
I also don’t see why there would have been any considerable confusion about whether or not prepaid property taxes would qualify for the state and local tax deduction. I thought the IRS guidance was pretty clear, and logical. As I said, that aspect of the situation is moot now, anyway.
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