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IRS Advisory on Prepaying Property Taxes Shouldn't Affect Hoosiers

Indiana conducts assessments in June, so early payments should be deductible on 2017 income taxes

(INDIANAPOLIS) - The IRS is warning taxpayers playing "beat the clock" with your property taxes may not work. But Hoosiers should be in the clear.

 

Next year, there'll be a new $10,000 limit on the deduction for state and local taxes. Some people have been prepaying next year's property taxes to take the full deduction while they can. The IRS now says you can't do that unless the assessment for your 2018 bill was made in 2017.

 

Fortunately for Hoosiers, Indiana law requires exactly that. 2018 tax bills haven't gone out yet, but assessments were completed six months ago. County auditors apply deductions to come up with a net assessment. The amount you owe is finalized once the state approves local tax rates.

 

Marion County Assessor Joe O'Connor points out most people's tax bills aren't high enough for the cap to matter. The deduction covers state and local income taxes and a portion of your BMV taxes as well as property taxes, but Indiana's property tax caps limit your property tax bill to 1% of your home's value. 

 

(Photo: Valeriva/Thinkstock)

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