Local homeowners line up in rush to prepay taxes before new rules begin

County officials are seeing a rush of homeowners wanting to prepay property taxes before the end of the year, as new rules effective in 2018 could change the way people benefit from tax deductions.

Treasurers offices are busy in Montgomery and Warren counties dealing with increased call volumes and lines out the door this week.

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“People are lined up out the door and across the lobby. It started at 8:30 Tuesday morning,” said Barney Wright, Warren County treasurer. “We’ve been here late all week taking care of processing payments ... A lot of people are concerned about paying their taxes early. People are worried about losing their deductions.”

Under President Donald Trump’s tax plan, which goes into effect next year, state and municipal tax deductions will be capped at $10,000. People may benefit by prepaying their real estate taxes this year and include that as deductions for tax filings due in April 2018.

The IRS issued an advisory on Wednesday, stating the agency has received a number of questions as to whether prepaid real estate taxes are deductible.

“In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018,” the IRS advisory states. “A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.”

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In Ohio, property taxes are paid for the year prior, so payments due in 2018 are based on 2017 values.

Assistant Treasurer Kriss Gang in Montgomery County said they usually have an uptick in people prepaying taxes at the end of the year, but this year there’s been a marked increase.

“The phones have been ringing off the hook,” Gang said.

Gang said the changes coming in the tax code will likely impact people who own multiple properties.

In Warren County on Thursday, Siva Iyer of Mason said he had been waiting about 30 minutes in the hall outside the office. 

He said he expected to save “at least a thousand dollars” on his federal tax bill by paying his property taxes before the end of the year.

Friday will be the last opportunity to prepay real estate taxes in Montgomery and other counties across the state, unless individual offices decide to hold special hours on Saturday.

This news organization is working to gather more information on how the new rules could impact taxpayers.