Document text
Since You Asked: Oregonians can't prepay future property taxes Thursday Dec 28, 2017 at 12:01 AM I've heard a tip to prepay my future property taxes before 2017 ends because of the national tax changes. Is that a good idea? — Curious Taxpayer Prepaying property taxes before a new federal cap on state and local deductions kicks in might be a good idea for some depending on their tax circumstances, but Oregonians are out of luck. Oregon law does not allow people to prepay property taxes for future years. The Jackson County tax office has received so many queries about the issue that is has changed its answering machine message to alert residents to that fact. People who have already been billed for their taxes and owe money can pay those taxes, according to the tax office. Congress recently approved a major tax overhaul that goes into effect Monday, Jan. 1. Current federal law allows people to deduct their property taxes from their federal income tax bill. But a $10,000 cap on deductions for all local and state taxes starts in 2018. People in states where prepayment of future property taxes is allowed still need to use caution. On Wednesday, the Internal Revenue Service issued advice on the issue. "In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018," the IRS said. "A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed." The tax overhaul brought a host of changes. A variety of deductions will be limited, with some types disappearing in 2018. But tax rates will go down for many taxpayers in the coming year. Depending on your situation, strategies to reduce taxes could include: Take as many deductions as possible for 2017 — while they last. Delay the receipt of income until 2018, when tax rates fall. Freelance workers and small business owners, for example, could delay seeking payment for work or collecting on a bill until 2018. Make charitable donations before 2017 ends. Make purchases that count as business expenses before 2017 ends. Make contributions to individual retirement accounts. The deadline for 2017 contributions is the April 2018 tax deadline, according to the IRS. Consult a tax professional for advice on your specific situation. — Send questions to “Since You Asked,” Mail Tribune Newsroom, P.O. Box 1108, Medford, OR 97501; by fax to 541-776-4376; or by email to [email protected]. We’re sorry, but the volume of questions received prevents us from answering all of them.