Client Alert: You CAN Prepay Your Ohio Real Property Taxes
December 30, 2017 • 2 min read
Client Alert: You CAN Prepay Your Ohio Real Property Taxes
IRS Advisory does NOT limit deduction for taxes paid before year-end
– IMMEDIATE ACTION MAY BE REQUIRED –
Beginning in 2018, the recently enacted federal tax legislation limits the annual deduction for state and local taxes to $10,000. You may have seen significant recent press coverage questioning whether real property taxes may be prepaid in 2017 to avoid this limitation. (Crain’s Cleveland Business, Taxpayers hit key IRS Hurdle in rush to prepay on property levy, Dec. 28, 2017). This coverage was in response to a recent advisory published by the IRS (IR 2017-210)indicating that real estate taxes may only be prepaid and deducted if the taxes are “assessed” prior to January 1, 2018. When taxes are assessed is a matter of state law.
In Ohio, real estate taxes are paid in arrears, meaning 2017 taxes are due and generally paid in 2018. Nonetheless, these taxes were assessed as of October 1, 2017 and, thus, may be prepaid before year-end. To take advantage of the unlimited deduction in 2017 you should prepay your 2017 real estate taxes to the county before Monday. The prepayment of property taxes will only be beneficial for taxpayers who itemize deductions and are not subject to alternate minimum tax.
Payments are deductible in the year they are delivered, which includes payments that are postmarked by December 31. Taxpayers relying on delivery to the U.S. Post Office should send the payment via Certified Mail and obtain a receipt to establish delivery in 2017. Additionally, many counties allow for online tax payments (subject to a fee – use the electronic check / bank account option for a minimal fee) to ensure payment is made during 2017, including Cuyahoga, Summit and Stark Counties:
