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December 24, 2019
Question

Property tax deduction

  • December 24, 2019
  • 2 replies
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If I pay first installment for 2020 in addition to 2019 will it lower my taxes?

    2 replies

    VolvoGirl
    Employee
    December 24, 2019

    Only if you itemize deductions and are able to deduct it.   

    But many people will be switching to the Standard Deduction since it is now double.  And there is a max 10,000 limit (5,000 MFS) of property tax and state taxes "SALT".  SALT is State And Local Tax.  Which includes property tax, any state tax paid like for last year’s return and includes any state withholding from your W2s and any 1099s you have. And any taxes in W2 box 14 and 19 like SDI or VDI. You can only deduct up to 10,000 (5,000 MFS) for SALT State and Local Taxes.

     

    For 2019 the standard deduction amounts are:

    Single 12,200 + 1,650 for 65 and over or blind

    HOH 18,350 + 1,650 for 65 and over or blind

    Joint 24,400+ 1,300 for each 65 and over or blind

    Married filing Separate 12,200 + 1,300 for 65 and over or blind

     

     

    rjs
    Employee
    December 24, 2019

    In addition to what VolvoGirl said, the prepayment will not lower your tax if you are subject to AMT (Alternative Minimum Tax), because the deduction for property tax is disallowed under AMT.

     

    Keep in mind that prepaying your property tax might reduce your 2019 tax, but it might also increase your 2020 tax because you will not have that payment to deduct in 2020.