Skip to main content

Why are people suddenly scrambling to pay their property taxes early?

It all comes back to the big tax bill that was passed.

What's happening?

Some Americans are rushing to pay their property taxes ASAP – despite there being months until the actual deadline – to get them in before 2017 is up.

Because of this scramble, Hennepin County is opening up the government center for extended hours through Dec. 30, so residents who want to prepay have more opportunities to do so. (You can also pay online or by mail – details here.)

Why would people want to pay their taxes early?

It all comes back to the big tax bill passed by Congress and signed into law by President Donald Trump, the Tax Cuts and Jobs Act.

One of the changes to the tax code is a limit on how much you can claim back on state and local taxes (referred to as SALT), which includes property taxes. Previously, there was no limit.

Under this new law, it's capped at $10,000.

That's a pretty big difference for some (though not all) people. Because the new tax bill doesn't go into effect until Jan. 1, 2018, the people who are significantly impacted by this change are paying their property taxes now – under the 2017 law, without the $10,000 limit.

Who exactly will be impacted?

Very generally speaking, rich homeowners in higher-taxed states are the most likely to see a dramatic impact. It could possibly cost some of them thousands of dollars, according to ABC News.

Including state income taxes can also be part of the SALT deduction, CNN explains (but the bill makes its o you can't prepay income tax like you can property taxes, according to NBC News).

It's important to note: This SALT change also only affects people who itemize their deductions, and less than one-third of taxpayers actually do that, CNN says.

What about in Minnesota?

Taxes can be complicated to compare state to state because of different laws, but Minnesota usually isn't among those with the highest property taxes. (It doesn't appear in the top 10 on any oftheselists.) Some counties are closer to the top end of the list than the bottom though.

The Tax Foundation found the county in Minnesota with the highest median property tax was Carver, at $3,153. 

Then there's the state income tax. Minnesota has a graduated rate (so you pay a higher percentage on income above certain amounts, not the entire amount), but it can still rankas one of the highest income taxes in the country.

So if someone here owns a house with high property taxes, owes a lot on income taxes, and itemizes their deductions, they might far exceed that new $10,000 SALT cap for 2018

Still, Business Insider says nowhere in Minnesota will be among the hardest hit counties.

What should I do?

Everybody's situation is different, and other changes to the tax code might more than make up for the SALT cap being put in place.

So if you have any questions, your best bet is to reach out to a tax preparer and get their opinion.

Next Up

Bar beer

Study: Excessive drinking cost Minnesotans almost $8 billion in 2019

The study was published by the Minnesota Department of Health Thursday.

Disney+

Price of Disney+ is going up, unless you want ads

The ad-free version of Disney+ will increase from $7.99 per month to $10.99 per month, effective Dec. 8.

SuspectsWantedMOAShooting

Mall of America shooting suspects arrested in Chicago

The two suspects were spotted leaving a barber shop.

Flickr - minneapolis police officer close-up belt camera - Tony Webster

Walz: Increased state law enforcement presence to stay in Twin Cities

A multi-agency effort to curb crime will go on until further notice.

SuspectsWantedMOAShooting

Bloomington PD to provide update on Mall of America shooting investigation

There's unconfirmed reports the suspected gunman and an accomplice have been arrested.

Screen Shot 2022-08-11 at 3.14.27 PM

Motorcyclist found dead behind guardrail 6 hours after crash

The crash happened before sunset Wednesday, but no one called 911.

Screen Shot 2022-08-11 at 2.49.44 PM

Strike vote set for 15,000 Minnesota nurses

If the nurses walk off the job, Minnesota would be home to one of the largest nurses strikes in U.S. history.

DSC_8611

Iowa Gov. asks court to lift injunction on 'heartbeat' abortion ban

A court challenge seeks to revive Iowa's abortion ban.

zipper merge, construction

6 transportation projects in Minnesota get $100M federal funding

The projects extend to areas all across the state.

covid

Minnesota's COVID-19 update for the week ending Tuesday, August 9

The number of cases in the latest reporting period dropped compared to the previous week's update.

Related

Comparing the tax cut plans from Republican lawmakers and Gov. Dayton

GOP lawmakers in the House and Senate have offered up big tax cuts. The governor's tax cut plan isn't as large.

How you doin' (your taxes)?

Is filing your taxes annoying? Yes. But the sooner you get it done, the sooner you can forget about it.

What the heck is going on with that big tax bill Senate Republicans have been talking about?

It looked like Senate Republicans would be able to pass it – then things hit a bump Thursday.

It's featured in Trump's tax return, so what is alternative minimum tax?

Donald Trump paid more tax in 2005 because of the alternative minimum tax, so what is it?

MNsure enrollment closes: Here's how many people bought plans

Nearly two-thirds of people who bought insurance through MNsure got a tax credit.

Who would be the winners and losers from the Senate tax bill?

The Senate passed the tax bill late Friday night.

U.S. Bank will give $1,000 bonus to about 60,000 workers as a result of tax bill

The company is also increasing its minimum wage for hourly employees.