Question

Can I deduct 2018 state tax I pay in 2017? 3 ans by comm: 1) Yes, 2) No but overestimate 2017 & apply to 2018, 3) No congress nixed it. Which is correct.

Forum|Forum|7 years ago
June 6, 2019
1 reply
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I've read Wealth Managers are suggesting individuals prepay 2018 State Tax by 2017 year end to be able to itemize both year's taxes in 2017 since it's limited in 2018 and standard deduction in 2018 is high enough that fewer people like myself will itemize. Looking at TurboTax Community I've seen 3 answers: 1) Yes, or Yes if your state allows it (Michigan does); 2) No but overpay your 2017 Estimated taxes by that amount and then apply it to 2018 in tax return (which I would think would come back from the state as an overpayment 1099 G form and would have to be reported on line 1040 line 10 in 2018; of 3) No, because the congress already nixed this idea (are they certain?)

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Opus 17

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Congress blocked it. Assuming the bill passed by the senate last night is signed into law without further changes.

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Opus 17

Employee

However, the Senate also restored the deduction for state and local taxes but put a cap of $10,000 on it. So most taxpayers won't be affected, and taxpayers will pay more than $10,000 in state and local taxes will still get to deduct the first 10,000.