Skip to main content

  •  Tel: (217) 525-1111
  •  Fax: (217) 525-1120  SECURE CLIENT PORTAL

  • Home
  • About Us 
    • Our Firm
    • Our Team
  • Client Services 
    • Audit & Assurance Services
    • Tax Services
    • Accounting Services
    • Consulting Services
    • Charitable & Not-For-Profit
    • Wealth Management
  • Resources 
    • Useful Websites
    • Financial Calculators
  • Careers
  • Contact

Our Mission

your success is our only mission

Helping You

manage the changing face of life

Proactive Planning

for a successful future

  Previous   Next

    You are here

  1. Home
  2. Blogs
  3. Does prepaying property taxes make sense anymore?

Does prepaying property taxes make sense anymore?

Submitted by Eck, Schafer & Punke, LLP on December 7th, 2018

Prepaying property taxes related to the current year but due the following year has long been one of the most popular and effective year-end tax-planning strategies. But does it still make sense in 2018?

The answer, for some people, is yes — accelerating this expense will increase their itemized deductions, reducing their tax bills. But for many, particularly those in high-tax states, changes made by the Tax Cuts and Jobs Act (TCJA) eliminate the benefits.

What’s changed?

The TCJA made two changes that affect the viability of this strategy. First, it nearly doubled the standard deduction to $24,000 for married couples filing jointly, $18,000 for heads of household, and $12,000 for singles and married couples filing separately, so fewer taxpayers will itemize. Second, it placed a $10,000 cap on state and local tax (SALT) deductions, including property taxes plus income or sales taxes.

For property tax prepayment to make sense, two things must happen:

  1. You must itemize (that is, your itemized deductions must exceed the standard deduction), and
  2. Your other SALT expenses for the year must be less than $10,000.

If you don’t itemize, or you’ve already used up your $10,000 limit (on income or sales taxes or on previous property tax installments), accelerating your next property tax installment will provide no benefit.

Example

Joe and Mary, a married couple filing jointly, have incurred $5,000 in state income taxes, $5,000 in property taxes, $18,000 in qualified mortgage interest, and $4,000 in charitable donations, for itemized deductions totaling $32,000. Their next installment of 2018 property taxes, $5,000, is due in the spring of 2019. They’ve already reached the $10,000 SALT limit, so prepaying property taxes won’t reduce their tax bill.

Now suppose they live in a state with no income tax. In that case, prepayment would potentially make sense because it would be within the SALT limit and would increase their 2018 itemized deductions.

Look before you leap

Before you prepay property taxes, review your situation carefully to be sure it will provide a tax benefit. And keep in mind that, just because prepayment will increase your 2018 itemized deductions, it doesn’t necessarily mean that’s the best strategy. For example, if you expect to be in a higher tax bracket in 2019, paying property taxes when due will likely produce a greater benefit over the two-year period.

For help determining whether prepaying property taxes makes sense for you this year, contact us. We can also suggest other year-end tips for reducing your taxes.

Thomson Reuters © 2018

Contact Us

Tell a Friend

227 South 7th Street, Springfield, Illinois 62701 United States

227 South 7th Street
Springfield, Illinois
62701 United States

  •  Tel: (217) 525-1111
  •  Fax: (217) 525-1120
  •  hkern@espwms.com

Securities offered through Avantax Investment ServicesSM, Member FINRA, SIPC 

Investment advisory services offered through Avantax Advisory ServicesSM​.

Insurance Services offered through an Avantax affiliated insurance agency.

Avantax affiliated advisors may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.

The Avantax family of companies exclusively provide investment products and services through its representatives.  Although Avantax Wealth ManagementSM does not provide tax or legal advice, or supervise tax, accounting or legal services, Avantax representatives may offer these services through their independent outside business. 

This information is not intended as specific tax or legal advice.  Please consult our firm and your legal professional for specific information regarding your individual situation.

Content, links, and some material within this website may have been created by a third-party for use by an Avantax affiliated representative.  This content is for educational and informational purposes only and does not represent the views and opinions of Avantax Wealth MangaementSM or its subsidiaries.  Avantax Wealth ManagementSM is not responsible for and does not control, adopt, or endorse any content contained on any third-party website.

© 2025 Eck, Schafer & Punke, LLP. All rights reserved.

Website Design For Financial Services Professionals