ROXBURY, NJ – Roxbury residents can pre-pay their 2018 property taxes by Dec. 31, a move that might be a smart one due to recent changes in federal tax law.
“The tax overhaul plan approved by Congress last week has many wondering if they should pre-pay their 2018 property taxes,” said a press release from Roxbury Township Manager John Shepherd. “The Township of Roxbury advises that residents can pre-pay taxes if they choose – and that this is not a new policy.”
Under the new tax law, the individual deduction for state and local taxes for income, sales and property is limited to $10,000 for married and single filers and $5,000 for married people filing separately.
Shepherd said tax payments can be made in person at Roxbury Town Hall between 8 a.m. and 4:30 p.m. through Friday or via the township’s website. There is also a night deposit box at Town Hall.
Checks should be dated/dropped in the night deposit box no later than Dec. 31 but online payments need to be submitted no later than Dec. 28 “due to processing requirements,” Shepherd said.
“When paying online, please note that the system will offer the ability to pay first and second quarters in addition to selecting the option ‘pay this amount’ where you can insert your own estimate of future taxes,” said the manager. “Roxbury’s tax office employees cannot provide estimates of your future 3rd and 4th quarter 2018 taxes – you will have to estimate this yourself.”
Although Shepherd stressed “there is no guarantee you will be able to fully or partially deduct these payments on your 2017 tax return,” local accountant Ron DeFilippis said those who can afford to pre-pay should do it.
“The case law on this was established years ago,” he said. “The court said that if a tax is assessed and you want to prepay it, it’s deductible ... If you can pre-pay those by this Friday, you can deduct them in 2017.
DeFilippis said doing so could bring a double benefit. “You get that deduction in full, with no cap as there will be in 2018 and rates are dropping in 2018, in some cases dramatically, so you will have a better deduction.”
He also said it is smart for the self-employed, who do not receive salaries, to pay their fourth-quarter state income tax before the end of the year.
The whole thing here is the $10,000 cap on state and local taxes,” DeFilippis said. “That includes everything: Income, property tax and sales taxes. So most people in Morris County are going hit that easily.”
DeFilippis said he and his colleagues have been getting calls from clients “by the boatload” about the question of local tax pre-payment.
Although the deduction will be limited, DeFilippis said most people will benefit by the new tax law.
“The tax rates are coming down dramatically and that’s what people don’t understand because it hasn’t been explained to them,” he said. “We haven’t found a client yet who going to be hurt by it and we have 2,000 clients. People are going to be saving a lot with the new rates.”