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Tax season is on the horizon and big changes are ahead – the new tax bill will go into effect on January 1, 2018. Depending on your individual situation, there may be a few things you can do now to prepare for those changes, including maximizing your 2017 tax deductions.
Under current tax law, homeowners can deduct taxes paid to state and local governments, including property, income, and sales tax.
The new law caps the deduction at $10,000, either for property taxes in addition to state and local income taxes, or sales tax.
By prepaying property taxes that would otherwise be due in 2018, some taxpayers may be able to claim a deduction on their 2017 individual income tax return that would otherwise be lost in 2018 under the new legislation.
If you and your tax advisor decide to prepay your taxes, here is a list of prepayment options.
- Cook County residents may prepay the 2017 1st installment tax bill (55% of the total 2016 bill) at cookcounytreasurer.com.
- DuPage County residents may prepay up to 105% of their 2016 real estate tax bill at dupageco.org.
- Lake County residents may prepay up to 100% of their 2016 bill. Any balance will be billed in 2017. More information is available at lakecountyil.gov.
- McHenry County residents may prepay a deposit of any amount toward their 2017 bill at co.mchenry.il.us. The deposit amount will be held until 2017 tax bills are issued. Any difference must be settled by the due date of the 1st Installment.
- Will County residents may prepay a minimum of 50% and a maximum of 110% of the 2016 bill at willcountytreasurer.com.
Additional details can be found in this local news story or this local news article.
Taxpayers who fall under the Alternative Minimum Tax (AMT) will not receive a benefit from pre-paying. So before making any payments or claiming deductions, it’s always important that you check with your personal tax advisor for advice specific to your property or portfolio.
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Many Americans got some depressing news this week; either their tax return was not as large as they had hoped or, in some cases, they were told they owed additional money to either the Federal or State government or both. One way to save on taxes is to own your own home. [Read more…]