IRS: Prepaying Property Taxes Won't Let Most Get Around New Deduction Caps

Attention, thousands of homeowners standing in long local tax office lines across America this week: It may be for naught. The IRS announced Wednesday that early prepayments of 2018 property taxes will only be deductible in limited circumstances under the new federal tax code that takes effect Jan. 1. The Washington Post reports the IRS ruled that early filers could only avoid the controversial new $10,000 cap on deducting state and local taxes for properties that have been assessed in 2017—a criteria that few jurisdictions meet. Though thousands of Americans in high property-tax areas have been lining up to pay their 2018 property taxes early in order to utilize a federal deduction one last time before it’s scaled back, the decision appears to invalidate attempts to evade the new rule under the overhaul signed by President Trump. The Post reports the new advisory may lead some local governments to come under pressure to refund millions of dollars to taxpayers.