Q: With the new tax bill, is it true I can only write off $10,000 of my property taxes now? What if I paid more than that?
A: It's true. Property tax, sales tax and state tax deduction cannot exceed $10,000.00 per year. You may be able to deduct more property tax than that in 2018 (though not sales or income tax) if you pre-paid taxes in 2017.
A:
Yes the new tax laws limit the itemized deduction of sales tax or income tax, and property tax to $10,000. If you paid more than that amount the remainder of the amounts paid will simply not be allowed as a deduction.
Also, be aware that if you pre-paid 2018 property taxes so that you could deduct them in 2017, since there's no limit, your prepayment may not be allowed if the tax was not assessed. The IRS has already stated that they will be challenging prepayments where the tax was an estimate and not assessed.
The $10,000 cap is for individual Sch A Itemized Deductions and does not affect deductions for property taxes paid on business property under IRC 162.
Now is a fantastic time to see a tax attorney since we're all looking for ways around this cap. Especially if your CPA says there's nothing you can do about it.
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