Anyone else prepaying property taxes so you can still deduct them this year?

[wendow]

As for Texas, of course you pay more in property taxes. They have to offset the lack of income tax somehow. Where we live in NoVA, we have sales tax on everything (food tax is lower than regular sales tax) and we have higher property taxes but real estate costs more.

TX also offsets their lack of an income tax with higher local sales tax.

 

[wendow]

I just assumes everyone’s property taxes went up every year. We paid about $4000 a year when we bought our home 20 years ago, we are now over $12,000, and get a yearly increase.

Our property tax (CO) has gone up about $600 in the 4.5 years we have been in this house but our value has gone up about 150k so I'm not surprised. We were in our last house for 12 years and our property taxes went up about $20-40 per year because our value slowly increased each year and the occasional mill levy that gets passed.

 

[bdcp]

I just assumes everyone’s property taxes went up every year. We paid about $4000 a year when we bought our home 20 years ago, we are now over $12,000, and get a yearly increase.

When the market peaked in ~ 2005-6 our county adjusted the per $100 rate so no one's rates went through the roof. They tried to keep them close to what they were before the values climbed. I think the highest our rate has been is $1.25/$100. They didn't want people hit with huge tax increases all at once. That said, over time, our taxes have increased, due mainly to value increases. Over 14 years ours have gone from about $5500 to $8900 per year.

 

[cruiser21]

Yes, 5% are paying more. I'm middle class too, and my total take home pay is about what your write off was.

I feel for the people that are paying more, but it does seem like it limited to certain states. We are in the 90% that will benefit from this. I've noticed some people pay more in taxes then I make in a year. I can't complain though we have a lot of disposable income and are doing fine. I think this plan really benefits families in the 75k to 200k a year bracket the most.

 

[tvguy]

. I've noticed some people pay more in taxes then I make in a year..

I've noticed that too. At least as far as take home pay. And I'm in expensive California, and I have no trouble covering my bills. But....I AM cheap too.

 

[cruiser21]

I've noticed that too. At least as far as take home pay. And I'm in expensive California, and I have no trouble covering my bills. But....I AM cheap too.

We have no trouble covering our bills and still spend 15-20k a year traveling. We live in AZ where the cost of living is very reasonable and our wages are decent. We also tend to be pretty cheap in other areas outside of vacationing. Our family members in California don't travel at all...can't afford it and the make more then we do.

It's a interesting thread seeing how much taxes, home prices and incomes vary from state to state.

 

[tvguy]

I don't live in TX (I'm from there). I currently live in CO. Housing prices are not as bad here in CO as it is for you there in NJ but it's definitely pretty high here (avg home in Denver is around 430k and avg salary is about 65k). Our home is a 500k home and we pay less than 3k in property taxes.

TX has great home prices but high property taxes. Many of my relatives pay 8-12k a year on 300k homes.

I knew NJ and NY had very high taxes. It is crazy and I truly feel for you guys. Are salaries higher to compensate for that? I don't know how people make it.

I just looked my wife's stepmothers house in Texas. Her property taxes are $720 a year on a 1450 square foot house on 3/10th of an acre. Zillow lists it being worth $100,000. Houses aren't very expensive in Texas. My wife's nephew works in Houston and lives 20 miles away in Humble in a brand new subdivision in a 2,500 square foot house that I think he paid $200,000 for. But the low cost of living is why my wife's family all moved to Texas. Her dad and step-brother in law are all retired Air Force looking to stretch their pensions.

 

[starry_solo]

I'm in Southern CA. My home's assessed value is: $453K. 2017-2018 taxes are approximately $7400 (eek!)

Mortgage interest is over $10,000 a year. I pay more than $10,000 in state income taxes.

And I'm single, but living with family (it's my home though).

So, I expect to pay more in taxes.

Maybe I will be pleasantly surprised, maybe not.

 

[tvguy]

I'm in Southern CA. My home's assessed value is: $453K. 2017-2018 taxes are approximately $7400 (eek!)

Mortgage interest is over $10,000 a year. I pay more than $10,000 in state income taxes.

And I'm single, but living with family (it's my home though).

So, I expect to pay more in taxes.

Maybe I will be pleasantly surprised, maybe not.

If you are in California the law limits the property taxes to 1% of the purchase price, so your house has to be assessed for a whole lot more than $453k if the $7,400 is your property taxes, even if you have Mello Roos bonds.

 

[TwoMisfits]

I'm in Southern CA. My home's assessed value is: $453K. 2017-2018 taxes are approximately $7400 (eek!)

Mortgage interest is over $10,000 a year. I pay more than $10,000 in state income taxes.

And I'm single, but living with family (it's my home though).

So, I expect to pay more in taxes.

Maybe I will be pleasantly surprised, maybe not.

Keeping this simple...

Well, you'll lose whatever taxes are over $10K, but you'll keep all the mortgage interest...so say you lose $10K in deduction on the itemization (if you had $20K total in SALT before) and $4k for no exemption...

So you lose $14K in deduction - if you were in the 25% bracket (say $100K income), that would be a $3500 tax increase...

However, you get a 3% rate cut...so on $100K, you'd save $3000 in taxes...

So, overall, you'd pay $500 more if you make $100K and have what I listed...if your income is better than that or you didn't deduct as much SALT, you'll come out much, much better...

PS - This is keeping calculations simple and rough, but it should give you an idea...

 

[deide71]

I feel for the people that are paying more, but it does seem like it limited to certain states. We are in the 90% that will benefit from this. I've noticed some people pay more in taxes then I make in a year. I can't complain though we have a lot of disposable income and are doing fine. I think this plan really benefits families in the 75k to 200k a year bracket the most.

Household income of 165k here and paying more.

Just remember they are replacing your deductions with child tax credits that go away once your 2’kids are 17...but your deductions are gone for good.

 

[deide71]

I'm in Southern CA. My home's assessed value is: $453K. 2017-2018 taxes are approximately $7400 (eek!)

Mortgage interest is over $10,000 a year. I pay more than $10,000 in state income taxes.

And I'm single, but living with family (it's my home though).

So, I expect to pay more in taxes.

Maybe I will be pleasantly surprised, maybe not.

You are als losing the personal exemption of 4100 you take when you itemize...

 

[havaneselover]

Household income of 165k here and paying more.

Just remember they are replacing your deductions with child tax credits that go away once your 2’kids are 17...but your deductions are gone for good.

I don’t really get the justification for under 17. It seems so arbitrary. Good grief 17 is about when they are costing you an arm and a leg!

 

[abcboys]

I don’t really get the justification for under 17. It seems so arbitrary. Good grief 17 is about when they are costing you an arm and a leg![/QUOTE
I've always thought the same thing!! Why 17??

 

[starry_solo]

I don’t really get the justification for under 17. It seems so arbitrary. Good grief 17 is about when they are costing you an arm and a leg!

It's weird that they aren't keeping it for 26. That's how old the kids can be on your healthcare coverage, right?

 

[havaneselover]

It's weird that they aren't keeping it for 26. That's how old the kids can be on your healthcare coverage, right?

26 seems a bit extreme. I know this isn’t the norm but I graduated college at 20, moved to Chicago, and supported myself. But parents who get child support usually get it until their child turns 18 or graduates high school which makes sense.

 

[Mackenzie Click-Mickelson]

It's weird that they aren't keeping it for 26. That's how old the kids can be on your healthcare coverage, right?

Yeah 26 is an arbitrary age too. But the thing is you can claim yourself on your own taxes and yet still be covered under your parent's healthcare. They aren't tied to each other. It wouldn't make sense to allow someone child tax credits when they aren't actually providing for their child other than they can still cover them under their own health insurance eligibility wise.

If parents were inclined to they could work out and have their child pay a portion of the health care if they were still covered under their parents. This is what I did for my mom. When I graduated college I was 22 and had 2 weeks to find health/eye/dental coverage or go for Cobra. I did end up doing Cobra for dental and eye but went with a referral rate for Blue Cross Blue Shield for health. The very next year is when the law was passed and I went back onto my mom's insurance but paid a portion of the health/eye/dental insurance per month to my mom since she went from a single to a family plan when she added me back on. But I also started late in the year with the same company she was working for. The next year I went on my own plan at the company. All this time I had stopped being a dependent according to income taxes when I was 17/18 and had been filing my own income taxes and yet health insurance wise I was covered under my mom even under the old law while I was in college.

My parents are divorced though..we had a interesting set up. My mom always covered my sister and I under her health insurance because it worked out much better. My dad was self-employed insurance agent. However, with taxes my mom claimed my sister as a dependent and my dad claimed me as a dependent. The year I was 17 turning 18 I hadn't lived at my dad's house at all so I claimed myself which prevented my dad from claiming me as a dependent. Thus I was 17 and wasn't a dependent but was covered under my mom's health insurance.

 

[cruiser21]

Household income of 165k here and paying more.

Just remember they are replacing your deductions with child tax credits that go away once your 2’kids are 17...but your deductions are gone for good.

I'm aware of that but our property taxes are 2400 and our state taxes are low. The child tax credits used to go away at 16. We are definetely coming out ahead. The interest on our mortgage is very low we only owe about 100k and we're at 3%. We bought our home 20 years ago.

 

[tvguy]

...but your deductions are gone for good.

Nothing when it comes to taxes is gone for good. Gone until they change it again.

 

[TwoMisfits]

Household income of 165k here and paying more.

Just remember they are replacing your deductions with child tax credits that go away once your 2’kids are 17...but your deductions are gone for good.

You get a $500 credit for 18 to 22s (or as long as dependents), so it's not totally gone, just less.http://money.cnn.com/2017/12/20/new...reform-everything-you-need-to-know/index.html

At $165K, you should have $4950 in less tax just from the rate cut...and you were losing almost all your child tax credit anyway, since that started phasing out at $110K...are you sure you are as behind as you think? I guess I could see it if you itemized a lot in SALT or mortgage deduction...