HOUSTON -- The new GOP tax bill means big changes in 2018, but a perceived loophole for some to avoid a pinch is causing chaos for those that pay property taxes.
In a nutshell, in 2018, the standard deduction is almost being doubled while the amount of state and local taxes you can deduct, which include property taxes, from your federal income tax will be capped at $10,000.
Those with high property taxes have flocked to their local tax collector to try and pre-pay their 2018 property taxes based on estimates, with the hope they can deduct them from 2017 income tax if they pay this year.
But the IRS clarified the deduction late Wednesday, and for Texas residents, the news is not great.
"Texans would only be able to deduct it from their income tax if the property was paid for and assessed in 2017, and in the state of Texas for 2018, they will not be assessed until Jan. 1," said Mike Lykes, Chief of Staff, Ann Harris Bennet Harris County Tax Assessor Collector and Voter Registrar's Office.
Still, residents in Harris County rushed to their collection office, some to make sure they get their payment for 2017's property taxes on 2017's ledger while they can get that tax benefit.
Many others are still holding out hope for the loophole.
"My decision is to go ahead and prepay. The bottom line is that I was willing to take the risk anyway."
But it looks like right now, that's not going to pay off when April rolls around. So, if you're itemizing in 2017, there's still some things you can do before Jan. 1 with that extra money, if your're lucky enough to have some.
"You might look at making more charitable contributions by the end of the year. Employee business-related expenses will not be deductible starting in 2018 so if you have some of those expenses that you were going to incur again in maybe January or February you might go ahead and pay for them now," said Edward M. Gardner, PC CPA. "These are things that you need to review and look at previous year's returns, and then look at your information this year and it's always good to pass it by a tax professional."
Yeah, because the stuff was hard enough to understand before all the changes. Lots of people are just hoping the government puts all the money to good use!