you can’t deduct your 2018 property taxes before the new law goes into effect
RACINE COUNTY With 2017 coming to an end and the new 2018 federal tax bill taking effect soon, some residents are hustling to pay their taxes before the big change.
However, one local myth the ability to pay 2018 property taxes in 2017 has caused many county treasurers’ phones to ring with questions about how to pay early. The short answer is Wisconsin residents cannot pay next year’s property taxes in the current year and never could have, according to a state statute.
State statute 74.13, taxes paid in advance of levy, states “general property taxes, special assessments, special charges and special taxes may be paid in advance of the levy during the period from August 1 until the third Monday in December each year.” The statute only pertains to paying ahead on the current year’s taxes.
Under the new tax law, a cap is placed at $10,000 for those who want to deduct payments for state and local taxes. That will impact some residents in Racine County with high property taxes.
But in states like Minnesota, Maryland and Virginia, residents have been prepaying this year’s property taxes in order to avoid the $10,000 cap.
The new federal tax bill was signed by President Donald Trump on Friday.
Racine County Treasurer Jane Nikolai said her office has been receiving several calls the last two weeks about payment of 2018 property taxes.
“People are scrambling and trying to take advantage of the old rules, so they want to prepay their 2018 (taxes) in 2017, so they’re fully deductible. But they can’t,” Nikolai said. “They cannot prepay their 2018 taxes any earlier than Aug. 1, 2018.”
Nikolai said that despite residents in other states being able to prepay their 2018 property taxes, “here in the state of Wisconsin that is not an option.”
“Because of this law change, where you’re capped at $10,000 starting in 2018, some people will no longer be itemizing (their taxes), they’ll be taking the standard deduction,” Nikolai said. “So they won’t get that itemized deduction credit.”
For those wanting to pay their 2017 taxes, including property taxes, before the new law goes into effect, Nikolai said they should pay them before the end of this year especially those above the $10,000 cap.
In an effort to make up for the deduction losses, Martin said she plans to make her 2018 charitable deductions in 2017.
“I’ll make the charitable deduction that I would’ve made in 2018 this year, because it will be a tax benefit and it won’t be next year if I don’t itemize,” Martin said.
She also said she’s frustrated that residents of other states can pay this far in advance, but Wisconsin can’t. “I don’t like being disadvantaged relative to other states, which I believe we are in Wisconsin,” Martin said.
Mount Pleasant Village Clerk Stephanie Kohlhagen said some village residents will be affected by the deduction cap, but many will not.
“There are some houses that are paying $5,000 in property taxes, but we have a substantial amount of properties that that are $3,000, so they’re not going to hit the $10,000 (cap),” Kohlhagen said. “It’s between them and their accountant and how they do their taxes and what they could claim.”