Local homeowners rush to pay property taxes ahead of federal deduction cap

A change in the tax code is sending some metro-east homeowners rushing to the county treasurer’s office before the end of the year to take care of a chore most might put off — paying their property taxes.

New tax legislation passed by Congress earlier this month puts a $10,000 cap on the amount of state and local taxes people can deduct on their federal returns, beginning in 2018. Previously, there was no cap, so a homeowner with a $15,000 property tax bill who paid $20,000 in income tax could deduct $35,000 on his or her federal returns.

The change will primarily affect wealthier homeowners. Madison County Treasurer Chris Slusser said more than 100 homeowners lined up to pay their bills on the day after Christmas. Most fell into the upper-middle class with upward of $30,000 in income tax along with real estate taxes of more than $10,000, Slusser said.

Homeowners have to beat a Friday deadline to avoid the new cap for another year. The last week of the year is normally slow in the treasurer’s office except for homeowners who come in to pay delinquent taxes, “but it was so busy (Tuesday) it was like one of our normal due dates,” Slusser said.

“We’ve had a flood of people come in to pay. This is their last chance to take advantage of (the deduction),” Slusser said.

Slusser urged taxpayers to consult with a tax adviser to decide whether they should pay their property taxes early. Accountants have been calling some of their clients and suggesting they do so, said St. Clair County Chief Deputy Treasurer Andrew Lopinot.

“We have seen an uptick in the last couple of weeks. We believe it has to do with the tax bill that was signed by Congress and the president,” Lopinot said. “We’ve seen a big increase.”

Homeowners also lined up at the St. Clair County Treasurer’s Office on Wednesday to pay their bills before the deadline of Friday afternoon. Belleville-area resident Vic Svec was one of those homeowners.

“Might as well get ahead of the game,” Svec said. “I figured a trip to the courthouse was worth a couple hundred dollars.”

Svec estimates he’ll save at least $200 by paying his property taxes before the end of the year.

Paul Lowery was also at the St. Clair County Treasurer’s Office to pay his bill early.

“The taxes that I pay for 2017 I think will be at an advantage because I’m going to deduct more real estate taxes,” Lowery said. “In ’18, I’m not sure yet. With the cap at $10,000, it’s going to be a challenge.”

But not everyone can benefit from paying their taxes early. Tracy Beveridge, an accountant in New Jersey, told NPR each taxpayer should check with an accountant to see if it would benefit them. Out of the 80 clients she’s spoken with about the matter, only four would benefit from paying early, Beveridge told the news station.

This story was originally published December 27, 2017 at 1:22 PM with the headline "Local homeowners rush to pay property taxes ahead of federal deduction cap."