IRS: Prepaying for tax break OK

Taxpayers can deduct their 2018 state and local property taxes on their 2017 returns if they pay those tax bills before the end of the year — and only if the taxes were assessed before 2018, the Internal Revenue Service said Wednesday.

Wednesday’s IRS statement comes as homeowners in states with the highest property taxes have been peppering officials with questions about how to prepay the levies to try to take advantage of a tax break that will be limited next year.

The IRS advisory notes that state and local laws determine “whether and when a property tax is assessed” — and some localities have not yet assessed 2018 property taxes. Taxpayers should check with their state and local taxing authorities to determine whether the 2018 real property assessments have been done.

The tax-overhaul bill that President Donald Trump signed into law last week will limit the deduction that individuals can take for the state and local taxes they pay. As of Jan. 1, the deduction will be capped at $10,000 — a limit that applies to any combination of property taxes and income or sales taxes.

In Arkansas, Gov. Asa Hutchinson issued a statement advising taxpayers to contact county officials about early payments.

However, several county tax collectors have said early payments aren’t possible because the amount that would be due in 2018 hasn’t been determined. Under Arkansas law, property is assessed and taxes are collected in different tax years.