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Old 27 December 2017, 11:26 PM
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Default Why Some Homeowners Are Scrambling To Prepay Their 2018 Property Taxes

Part of the Republican tax overhaul that President Trump signed into law last week has homeowners around the country doing something unusual: rushing to pay their 2018 property taxes well before the due date.

That's because the new law includes a $10,000 cap on the amount of state and local taxes people can deduct on their federal returns. Before, if someone paid $24,000 in property taxes — as some people in higher tax states like New York and California do — and then paid $20,000 in state and local income taxes they were allowed to deduct $44,000 on their federal tax return. Now that number is capped at $10,000. The change could cost some people thousands of dollars.

https://www.npr.org/2017/12/26/57362...property-taxes
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Old 28 December 2017, 12:34 PM
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People have been lining up in this county as well as others from what I've heard. I don't even thing some counties have set their 2018 rates. I don't think it will affect me; I think my property taxes are high but they are not 10k high.
I did hear a (Montgomery) county official say that next year's tax has to to prepaid by 12/31 for it to count. I think that neighboring Fairfax County has set up a drop box so people won't have to stand in line.
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Old 28 December 2017, 02:51 PM
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My county has them out by mid-October and due by Jan 15th. So pretty easy for us to 'prepay'.

OY
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Old 28 December 2017, 03:13 PM
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Where I live (Montgomery County MD), tax bills are sent out in the middle of July. You can pay the bill in two halves, the first half being due 9/30 and the second one due on 12/31. I have a pretty good idea of what next year's bill will be, but I have other things to pay, so even if I wanted to prepay, I simply could not.
With the due date you have, it's simplicity itself to prepay. Is there any big rush in your county that you know of?
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Old 28 December 2017, 03:34 PM
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Prince William County, VA sends out real estate tax notices in the early part of the year and there is a half amount due in the middle of the year and the second half due later in the year.
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Old 28 December 2017, 03:43 PM
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I get two tax bills a year, due in February and August. I'm not sure how they are divided, but I pay about 20% in the first and the rest in the second. That makes for an ugly bill in August.
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Old 28 December 2017, 03:44 PM
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Ours are due in two equal parts, one in March and the other in June. It's odd as they are so close together but on the plus side it means you cruise into Christmas without the property tax bill hanging over your head I guess.
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Old 28 December 2017, 05:20 PM
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Quote:
Originally Posted by Beachlife! View Post
I get two tax bills a year, due in February and August. I'm not sure how they are divided, but I pay about 20% in the first and the rest in the second. That makes for an ugly bill in August.
Well, the taxes (in Michigan) are due July 1 and December 1 each year. You can pay without penalty or interest through February (December/Winter bill) and September (July/Summer bill).

The differences have to do with how taxes have historically been collected in Michigan. State Education, County and City taxes are the Summer ('August') bill. Townships taxes are the Winter bill, along with 'extra' County taxes. Local School taxes are either split between the two bills or all on the Summer bill.

That is why the Summer bill is so much higher, especially if the school tax is not split and you live in a City. The only thing left for Winter are the extra-voted County millages. Some areas do not even have a Winter bill now.

(The hazard of working in the title industry. We won't even talk about assessed values and SEVs!)
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Old 28 December 2017, 06:32 PM
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We get ours due 1/31 and 9/30 each year (also Michigan).

The winter tax is usually about $80, and the summer tax is A LOT HIGHER, usually around $5K. Summer generally sucks because that's when our annual bills are all due -- homeowners insurance, car insurance, etc, since we bought our house and emigrated in May.
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Old 28 December 2017, 08:29 PM
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Originally Posted by DawnStorm View Post
I don't think it will affect me; I think my property taxes are high but they are not 10k high.
My property taxes are just under that, so if it was only property tax it wouldn't really affect me either. But then I pay over 20k in state income taxes on top of that, which used to be a huge deduction and will now not be deductible at all. If I prepaid the property tax, then almost half of the income tax would then be deductible. However, the property tax bill and homeowner's insurance usually goes through my mortgage payment rather than to me directly. It would be a huge hassle to figure out how to change all the paperwork during my holiday break because Republicans rushed this through at the last minute. And it only affects at most the first year. It's not a sustainable long term strategy.
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Old 29 December 2017, 01:59 AM
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Originally Posted by Errata View Post
My property taxes are just under that, so if it was only property tax it wouldn't really affect me either. But then I pay over 20k in state income taxes on top of that, which used to be a huge deduction and will now not be deductible at all. If I prepaid the property tax, then almost half of the income tax would then be deductible. However, the property tax bill and homeowner's insurance usually goes through my mortgage payment rather than to me directly. It would be a huge hassle to figure out how to change all the paperwork during my holiday break because Republicans rushed this through at the last minute. And it only affects at most the first year. It's not a sustainable long term strategy.
But you've made a huge deal about being Rich. Honestly, I hope you pay taxes until you die.
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  #12  
Old 29 December 2017, 02:09 AM
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Originally Posted by Plurabelle View Post
We get ours due 1/31 and 9/30 each year (also Michigan).

The winter tax is usually about $80, and the summer tax is A LOT HIGHER, usually around $5K.
I'm still trying to wrap my head around this. Why in the world are your taxes split like this? Your winter dues look like a rounding error.
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Old 29 December 2017, 04:47 AM
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Originally Posted by Plurabelle View Post
But you've made a huge deal about being Rich. Honestly, I hope you pay taxes until you die.
Obviously I am paying taxes, since the whole point of the SALT deduction is that it's about double taxation. Paying taxes on taxes. Look at the examples given in the article. The people affected are those in situations like mine. Mostly upper middle class people in blue states, who mostly didn't vote for these Republicans, which is why they feel comfortable targeting them.

The benefits of this plan go to the very wealthy who make their money through investment income. Their taxes will be slashed by this, and the deductions eliminated are not the ones that were most important to them. Most people won't see a huge immediate change in their taxes, but they've set up a deficit that will result in them needing to make cuts to social security and medicare that will affect a lot more of the population.

I'm fine with paying taxes, and I'd be OK with paying more for a good cause. I don't consider increasing the deficit and redistributing it to billionaires to be a good cause that makes me sanguine about the value I'm getting for being double taxed.
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Old 29 December 2017, 03:04 PM
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Originally Posted by Errata View Post

I'm fine with paying taxes, and I'd be OK with paying more for a good cause.
I agree with your whole post, I know many people in your same financial bracket (including my parents) who feel exactly the same way you do but since we don't have a like button on this board I am just quoting part of your post to say that I admire your calm and restrained response to what was, at best, an inappropriate comment.

Plurabelle - it is not us against the rich. Or it shouldn't be. That's the kind of divisiveness that allows people like Trump to thrive. And, frankly, the ranks of Democrats in your country and Liberals and the NDP in mine, are composed of many people who would be considered rich by most standards.
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Old 29 December 2017, 03:15 PM
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Originally Posted by Plurabelle View Post
But you've made a huge deal about being Rich. Honestly, I hope you pay taxes until you die.
I've been on these boards for more than 10 years and I don't recall Errata ever making "a big deal about being Rich." He's been open about his financial situation, but I've never felt he was bragging about it. And he's certainly never expressed any unwillingness to pay taxes.
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Old 29 December 2017, 05:04 PM
UrbanLegends101 UrbanLegends101 is offline
 
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Quote:
Originally Posted by Errata View Post

Most people won't see a huge immediate change in their taxes, but they've set up a deficit that will result in them needing to make cuts to social security and medicare that will affect a lot more of the population.

I'm fine with paying taxes, and I'd be OK with paying more for a good cause. I don't consider increasing the deficit and redistributing it to billionaires to be a good cause that makes me sanguine about the value I'm getting for being double taxed.
I think the first paragraph above is a forgotten detail in this entire tax plan change. Unless a reduction in the tax rates, reducing the Federal income tax liability for both individuals and corporations results in an increase in income for enough individuals to pay more taxes at the lower rates on higher income levels for revenues to be neutral, it would seem any tax rate reductions are going to result in higher deficits.

Obviously, some of that deficit can be reduced by reduced spending, but that doesn't seem to be the direction we are going.

I've done a few calculations on the effects of the new tax plan and it does appear that I will save a few thousand dollars. Fair enough, and I can find a way to spend it. With that said, I really do feel it is not fair to kick this deficit can down the road and make my children or their children be responsible to pay for saving me a few dollars.
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Old 29 December 2017, 07:31 PM
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It was the wrong thing to say, and I apologize, both to Errata and the board in general. It was truly out of character and I can't really explain why I said it. I NFBSKed up, and I am very sorry about it.
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Old 29 December 2017, 09:32 PM
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I have a good friend (as long as we don't talk politics) who constantly puts out these memes on Facebook calling all taxation theft.

He is a dyed in the wool upper case L Libertarian. And any money he pays in taxes is due to theft.

I once asked him if I was paid with the proceeds of crime. He was trying to cautiously word his response, but I was all "COOL".

His philosophy is that he will gladly pay for whatever social services, infrastructure and programmes he feels are necessary. Being forced to subsidize a project that provides him no benefit is immoral, according to him.

I love his ramblings. They are coherent. They are well researched and thought out. Then I tell him stories of Lebanon where people generally don't pay taxes, and you have to pay for your own infrastructure, social services and programmes. And ask him if he'd like to join me on my next tour.

He politely declines.
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Old 29 December 2017, 09:43 PM
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Originally Posted by UEL View Post
Being forced to subsidize a project that provides him no benefit is immoral, according to him.
In the case of this bill, the project we are subsidizing with middle class tax increases are different tax cuts for far wealthier people. Tax cuts specific to golf course, private jet, and brewery owners (like the administration and their friends). A huge drop in the corporate tax rate that CEOs admit will mostly go toward dividends and stock buy backs rather than jobs or pay raises (except for CEOs). It's embezzlement on behalf of the largest political donors, not infrastructure spending. Infrastructure and social program spending is very necessary, and this tax bill will only exacerbate that by reducing the money available for those things in order to enrich a tiny number of people with tens of millions of dollars or more invested.

The true cost of this bill won't happen until after it's implemented and we start seeing the deficits. That will be when Republicans will blame their debt on infrastructure and social program spending, and slash those things.
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Old 30 December 2017, 12:05 AM
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Most people won't see a huge immediate change in their taxes, but they've set up a deficit that will result in them needing to make cuts to social security and medicare that will affect a lot more of the population.
Not only that, but, as I understand it, while the slash in the corporate tax rate is "permanent" (no built-in expiration), at least some of that for individuals is not. This is pretty blatantly political, IMHO -- people's taxes might not go up too much while Trump is still in his first term, or while most of the congresspeople who voted for it are in their current terms, but eventually they will go up significantly. A vote to extend the individual cuts would make the deficit projections even worse than they already are. This whole plan makes no friggin' sense, even from the point of view of a supply-side economist; it's a pretty blatant transfer of wealth in the wrong direction.

Gee, we elected a billionaire president, and we wind up with a tax plan that mostly benefits billionaires. Who'da thunk it?
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