Updated: Want To Pre-Pay Your 2018 Property Tax Bill? Check With Your Accountant First

Update: The township Tax Collector’s office will be open from 8:30 a.m. to 12:30 p.m. Dec. 30 to accept payments. But read below first …

Original Story: Township residents who want to take advantage of a one-time loophole in federal tax law and pre-pay the first half of their 2018 property tax bills should first check with their accountants.

That’s the advice of one township-based CPA.

Barry Rosner, whose office is located on Route 27, said the cautionary tone is because everyone’s tax situation is different.

“Every person is individualized, so this is not one size fits all,” he said.

The new federal tax code, which goes into effect in 2018, limits the so-called SALT deduction – an acronym for state and local taxes – to $10,000 per person. Previously, that deduction was unlimited.

Analysts say that reduction in the deduction hits residents in states such as New Jersey hard because of its high property tax rate.

The federal Internal Revenue Service recently issued an advisory saying that deductions for 2018 property tax payments would be allowed, as long as those payments had already been billed. In New Jersey, that means property owners will only be able to deduct tax payments for the first two quarters, because that’s all that has been billed thus far.

Rosner said he has received “20-30 calls from clients over the past few days” asking about the deduction.

“Everybody has a different situation,” he said. “What kind of itemized deductions they take, are they in alternative minimum tax, can they take a portion, so you get the benefit this year, and next year you get the standard deduction …”

“I could give you six or even different scenarios,” he said.

Taxpayers who pay the alternative minimum tax – triggered when one’s earning exceed a certain threshold, which varies depending upon  a taxpayer’s status – have other considerations, Rosner said, because real estate taxes are not deductible if the taxpayer itemizes.

The bottom line, he said, is consult with a tax professional. But do it quick, because the last day to make the payment is Dec. 29.

Mayor Phil Kramer has also weighed in on the issue, saying in a statement that payments of the first two quarters of 2018 taxes will be accepted.

“Any payments in excess of those two quarters cannot be credited against payments for taxes not yet billed and may be refunded by the Tax Collector,” he said in the statement.

“Please note for those taxpayers whose taxes are paid by a mortgage company or escrow agent we highly recommended that you contact the mortgage company or escrow agents to confirm that you will be making advanced payments,” Kramer said. “We encourage any tax payer who is delinquent on their taxes to become current prior to the end of the year to take full advantage of the property tax deduction on their Federal Income Tax.”


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