IRS nixes property tax prepayments

The Internal Revenue Service (IRS) issued a warning Wednesday for taxpayers trying to prepay their 2018 property taxes before Dec. 31: Only taxes assessed and billed this year can be claimed on 2017 returns. The IRS advisory comes as taxpayers across the country—particularly in high-tax states like California, New York, and New Jersey—lined up at tax offices attempting to prepay their 2018 taxes before new deduction caps take effect. The tax system overhaul creates a $10,000 cap on the amount of state and local tax deductions payers can claim. “A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017,” IRS officials warned in response to the rush. State and local laws determine when and whether property tax gets assessed, IRS officials noted, meaning only taxpayers in certain areas will be able to successfully prepay.