It’s been about a month since the article about my family appeared in the New York Times and a lot of folks have been reaching out to ask if we ended up pre-paying our taxes. The answer is yes! But, it’s a pretty disappointing “yes”.
Let me explain.
After Governor Cuomo signed the emergency order on December 22nd that would allow New York residents to pre-pay 2018 property taxes in 2017, (and after the article about my family was published in the Times) the IRS made their own announcement (on December 27th) stating that pre-paid property taxes could only be counted as a 2017 income deduction if the taxes were assessed in 2017.
The IRS announcement really blew me away.
Thousands (if not tens of thousands) of people had already pre-paid their 2018 property taxes in full between the time Cuomo made his announcement on the 22nd and the IRS’ announcement on the 27th. Those poor folks ponied up big bucks thinking they were going to save some money, then the IRS changed the rules on them with only three days left in the year – truly crazy.
Luckily, we did not pre-pay our 2018 taxes prior to the IRS announcement – we were planning to, just were unable to submit the payment due to holiday travel. What isn’t so lucky is that the vast majority of the $21,000 we pay in property taxes goes to the local school district, and the school budget isn’t finalized until Q2 2018. The amount of our total 2018 tax bill that we were eligible to pre-pay was actually quite small – just $260.00 out of our overall $21,000 bill (just over 1%). As it turns out, in Westchester it’s very hard to assess taxes on short notice, it usually takes a few months. The only people who were able to scramble together and assess taxes in the last week of December were the local town firefighters – who were the recipients of our $260 pre-payment.
Our expected total tax savings from our pre-payment? Probably around $50.