There may be a long line of Orange County residents pre-paying 2018 property taxes Thursday and Friday, but it may all be for naught.
A change passed in the recent overhaul of the United States tax code has been the subject of national news stories in recent days and has incited an unusual scenario – people waiting in line to pay their property taxes early.
“Everyone is asking,” said Joel Levy, a CPA who owns an accounting firm in Chapel Hill. “I’ve had many clients write to me, ‘Should I pay my real estate tax?’”
The alteration to the tax system that is causing the rush caps the amount of state and local taxes that can be deducted at $10,000. But since the legislation does not go into effect until January 1, residents in some states are hurrying to pay next year’s taxes and claim the deductions on this year’s tax filing.
But North Carolinians are not likely to see any benefit from this strategy.
While the Orange County tax office is open normal hours Thursday and Friday and attempting to help residents who would like to pay their taxes early, the 2018 assessment will not be coming for several months. Since the taxes have not been assessed, the payments can not be deducted on this year’s tax returns, according to guidelines issued by the Internal Revenue Service.
“If it hasn’t been assessed before December 31, then it doesn’t matter if you pay it,” Levy said, “technically, it’s not deductible.”
Since 2018 property taxes have not been assessed at this time, Orange County residents who are pre-paying taxes are paying an estimated value, which county tax officials say may have to be corrected when the actual assessment is issued.
“Of course,” Orange County Tax Office director Dwane Brinson wrote in an email to WCHL, “those interested in prepaying still should contact their tax advisor or the IRS for a determination on deductibility of any such payments.”
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