While many people this week are queued up at retailers to return holiday gifts, "unprecedented" lines are forming at municipal offices around the country as homeowners hurry to prepay 2018 property taxes before the new GOP tax bill goes into effect on Jan. 1, reports the Wall Street Journal. That's because the deduction on state and local taxes, including property taxes, will be capped at $10,000 starting next year. In US states with a higher cost of living, that could mean a larger tax bill—and so homeowners are hurrying to prepay 2018's taxes before the new year so they can reap the full deduction and not get socked with a bigger tab in 2019. "You can partially prepay or fully prepay and … postpone the pain for one year," says a statement from Gov. Andrew Cuomo, who signed an executive order allowing residents in New York to prepay, per ABC News.
NorthJersey.com notes many municipal offices are therefore extending their hours during a week that's usually one of the slowest of the year, spurring long lines and phones "ringing off the hook," per a tax collector in Montclair, NJ. According to Congress' tax committee, the current uncapped deduction resulted in a $33 billion revenue loss for the feds in 2016, so lawmakers worked the $10,000 cap into the tax bill to recoup some of that revenue. One issue that has experts warning residents to consult with an accountant before breaking out the checkbook is that it's not yet clear whether the IRS will let these prepayments fly for deduction purposes. Another problem with the plan: Not everyone can afford to fork over that kind of money a year in advance. "Not everyone will be so lucky," the head of the New Jersey Society of CPAs says in a release. "It will depend on one's own financial situation." (More taxes stories.)
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