>> US home owners are lining up at local tax collection offices, hoping to prepay their real estate taxes before the end of the year. The rush coming after the Republican tax bill was signed into law last week.>> But, this is basically what it is.>> The overhaul set a cap of $10,000 on federal deductions of state and local income, and property taxes referred to as salt.
Reuters editor Dan Bases explains.>> In many of these high tax states such as New York, California, and New Jersey. Property taxes alone are well above $10,000. This move to prepay allows individuals to try to reduce that bill as much as possible. And then make that claim on their 2017 tax bill.
But it's a one shot deal, it's not going to happen again.>> But there's confusion among taxpayers after the IRS said Wednesday that the pre-payment of 2018 property taxes may not be deductible.>> Only the assessed taxes that are listed in your tax rules for the municipality will be allowed to be prepaid.
If it is an estimate, the IRS most likely is not gonna allow that to go onto your tax bill. So you can prepay, nothing wrong, but you're just out the cash without the prepayment if it's an estimated payment.>> New York Governor Andrew Cuomo says with the salt provision.
The new US tax code targets generally democratic leaning, high tax states, and may be unconstitutional. But it's not immediately clear what the constitutional or legal argument is. Cuomo said New York is considering overhauling its own tax system in response. But for now thousands of taxpayers are taking a chance with their odds, and getting that prepayment done and dusted.