Why are people suddenly scrambling to pay their property taxes early? - Bring Me The News

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.

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