The Latest: IRS issues guidance on prepayment of local taxes

AP News
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Posted: Dec 27, 2017 6:41 PM

HEMPSTEAD, N.Y. (AP) — The Latest on a rush to take advantage of a disappearing tax exemption (all times local):

6:30 p.m.

The IRS has issued guidance that could help homeowners figure out if they can save money by paying next year's local property taxes early.

The federal tax overhaul signed by Republican President Donald Trump last week puts a new $10,000 limit on deductions for state and local taxes.

People in some states have been lining up to pay their 2018 taxes early, hoping for one last shot at the exemption.

The IRS says Wednesday that some homeowners who pay real estate taxes early will be able to claim the deduction, but only if the taxes were assessed, billed and paid in 2017.

The IRS says people can't guess at what next year's assessment might be, pay that amount ahead of time and still get the deduction.

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12:48 p.m.

Homeowners are lining up in droves at local tax collection offices, hoping for a last chance to take a major tax deduction before it is wiped out next year.

In Hempstead, New York, town Tax Receiver Donald Clavin said "thousands" of people packed his office Tuesday trying to pay their 2018 property taxes a year in advance.

Similar scenes played out at government offices in towns and counties around the country with high local taxes.

The federal tax overhaul signed by President Donald Trump last week puts a new $10,000 limit on deductions for state and local taxes.

People in some states are trying to delay that hike for a year by paying their 2018 taxes early.

The IRS hasn't yet said how it would handle prepayments.