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The 2017 GOP Tax Bill: Should you Pre-Pay?

We have received many calls regarding prepaying real estate taxes for 2018 prior to December 31, 2017 based on the recently passed Tax Cuts and Jobs Act (TCJA). We apologize for the short notice, but like most tax laws, it is a complicated piece of legislation that will affect individual taxpayers differently based on a number of varying factors. Further, the most recent notice issued by the IRS (12/27/2017) has caused additional confusion by making the benefit of prepayment dependent on individual towns’ property tax assessment schedules and discretion.  Here is the long and short of it:

  1.   State, local, sales, and property tax deduction changes: The deduction for state and local income tax, sales tax, and property taxes (“SALT deduction”) will be capped at $10,000.
  2.   If you do not escrow your real estate tax payments you may benefit from prepaying the February 1, 2018 payment.
  3.   If you escrow your real estate tax payments and prepay the February 1, 2018 payment you will be overpaid with your city or town. It will then be up to you to work with the town to receive your refund. You are not able to reduce your escrow account due to the overpayment with your city or town.
  4.   You may also benefit from prepaying your January 15, 2018 Massachusetts estimated tax payment on or before December 31, 2017.

Additional information regarding the GOP Tax Bill and how it may affect you can be found here: https://en.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act_of_2017

IRS Tax Fraud Prevention Efforts Will Delay Refunds

Will Your Refund Be Delayed?

You may recently have heard that millions of refunds for the 2016 tax year are expected to be delayed.

The anticipated delay is largely driven by a new law aimed at giving the IRS more time to screen returns claiming both the earned income tax credit and additional child credit(s). This is in tandem with a broader prevention effort that includes zeroing in on fraudulent returns resulting from identity theft.

Though not everyone is affected, for those who are, it is, unfortunately, both inconvenient and unavoidable. On the other hand, the upside for all taxpayers is that the expansion of IRS scrutiny into vulnerable line items has ultimately proven to save the country billions of dollars every year.

For more complete details, check out this article…

And as always, feel free to contact us with any questions.