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Here's one thing SoCal taxpayers did differently this year
Taxes are due this Tuesday, and it's the last year to file under the old rules before the GOP's changes kick in.
Many Californians will be taking advantage of deductions they're about to lose moving forward. Because of the Republicans' tax overhaul, thousands of local households did one thing differently for their returns this year — they paid their property taxes earlier than they needed to.
Under the old rules, property taxes were deductible for taxpayers who itemize. But from here on out, deductions for property taxes, and other state and local taxes, will be capped at $10,000. That new limit could hit California homeowners especially hard. This year, many wanted to maximize their deductions while they still could.
Tax collection figures from local counties show that after the GOP tax bill passed in late December, thousands of Southern California homeowners scrambled to pay the second installment of their 2017 property taxes before the end of the year — even though the bill wasn't due until February 2018. By getting those payments in under the wire, households could justify deducting them on the 2017 returns they're sending in now.
In the second half of December 2017, L.A. County collected $1.1 billion dollars in property tax payments. That's more than four times the $242 million they took in during the same period in December 2016.
"This caught us a little bit by surprise," said the County’s Chief Deputy Treasurer and Tax Collector Keith Knox. All these payments rushed in over the holidays, and Knox said his office was "shorter staffed than we would be at other times of year."
Orange County saw a spike too. There, about 80,000 more households than usual paid their February property tax bills early.
Some homeowners even tried to get the following year's property tax bill on the books in 2017. But the IRS has said pre-payments of property taxes that were not assessed prior to 2018 will not be deductible on this year's returns.
Orange County Treasurer and Tax Collector Shari Freidenrich said Orange County had to reject more than 50 payments that didn't yet have property tax bills associated with them. Her office may exist to collect taxes, but it actually returned that money to those few over-eager taxpayers.
The local county tax collectors say there was a benefit to this influx of early payments. It taught more homeowners how to pay their bills online, which is something the counties have been encouraging more people to do. Freidenrich said about 20,000 payments totaling more than $90 million came in during the last three days of 2017. And they were all paid online.
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