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I’m sure you’ve seen the news about people lined up at their local offices attempting to prepay their property taxes before the new tax bill goes into effect. This can be an effective way to save thousands of dollars, but it’s not the right choice in every situation. Also, the IRS just made an announcement on this topic.
On this bonus episode of Investing in Real Estate, I’m coming to you with breaking news about the new tax code, and how you can plan your finances before the bill goes into effect January 1. I’m sharing five things you should consider before stepping into line to prepay your property taxes!
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Before you panic and head to your local offices to prepay your property taxes, there are a few things you should think about.
- Take a look at last year's tax return. This will be your jumping off point to determine if prepaying your taxes is right for your unique situation.
- Determine if you itemize your deductions or take the standard deduction.
- If you itemize your deductions, meaning your deductions will exceed $24,000. Prepaying your taxes is only applicable in this situation.
- If you itemize your deductions, then you need to take a comprehensive look at your state and local taxes, as well as your property taxes. If these are greater than $10,000, then prepaying your property taxes is likely the right choice for you.
- However, the IRS just made this important announcement: if you're prepaying your taxes, they must be assessed taxes. Estimated taxes cannot be prepaid.
If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.
On this episode you'll learn:
- In which states are homeowners largely affected by this new bill?
- What are the two stipulations the IRS declared?
- When would you benefit from itemizing your deductions?
- And more about how the new tax bill affects property taxes!