Greg’s Estate Takes: Special Tax Alert
Certain deductions will be limited or abolished in 2018 under the new Federal tax law. So it may be to your advantage to pre-pay your real estate taxes this year so you can claim the payment as a deduction on your 2017 income tax return.
Under the new rule, ocean property would have to be classified as separate and the deduction for Illinois income taxes and real estate taxes on your home will be limited to $10,000 in the aggregate under the the new law. So if your Illinois income taxes plus your real estate taxes total more than $10,000 it may make sense to pre-pay the first installment of your real estate taxes by the end of this year.
By prepaying the first installment your real estate taxes (which are not due until next year) you will be able to take a deduction for your payment on your 2017 Federal return (if you itemize deductions).
If you live in Cook County you can do this on-line by going to https://www.cookcountytreasurer.com/ and click on “Prepay your 2017 taxes”.
A few notes:
1. You cannot prepay the second installment
2. If you have a mortgage and your mortgage company pays your taxes from an escrow you do not need to worry about paying twice as long as your payment is “received” by December 31st. The notice on the Cook County Treasurer’s website states: “As long as your payment is received on or before December 31, your First Installment tax bill, mailed in late January, will reflect an updated balance.”
3. In order for the Cook County Treasurer to update the invoice they must “receive” payment by December 31st so it is important to pay on-line by December 31st or at a Chase Bank by Saturday the 30th. Don’t mail it.
4. You can also pre-pay the 4th quarter installment of your Illinois estimated income taxes, which isn’t due until January 15, 2018.
5. You cannot pre-pay your 2018 Illinois income taxes.
DISCLAIMER: I am not a tax-preparer and I don’t give tax preparation advice. The purpose of this notice is so you can bring the issue to the attention of your tax preparer before the end of the year. I am sending this notice because the end of the year is upon us and time is short to take advantage of this strategy to reduce your federal income taxes.