property taxes and bunching deductions
JGE
I have searched and it looks like this is ok. But it hasn't been
discussed
in about 5 years (as best I can tell) so I want to make sure they're
no IRS
rulings etc, so that people still think it's kosher ...
When bunching deductions, is it ok to group two years worth of
property taxes
into one year (I'd probably pay this year's late (in January) and next
year's in
December when due) ? I understand that I can't just arbitrarily
deduct 2009
and 2010 property taxes in 2010, but is it ok if I don't actually pay
the 2009
taxes until 2010 ? And I understand there will probably be a small
penalty
from the county for my late payment, but the benefit far outweighs it.
--
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Steve Pope
>I have searched and it looks like this is ok. But it hasn't been
>discussed
>in about 5 years (as best I can tell) so I want to make sure they're
>no IRS
>rulings etc, so that people still think it's kosher ...
>When bunching deductions, is it ok to group two years worth of
>property taxes
>into one year (I'd probably pay this year's late (in January) and next
>year's in
>December when due) ?
Yes that's fine. Property taxes, even for future years, are
deductible when paid.
Steve
HLunsford
> I have searched and it looks like this is ok. But it hasn't been
> discussed
> in about 5 years (as best I can tell) so I want to make sure they're
> no IRS
> rulings etc, so that people still think it's kosher ...
>
> When bunching deductions, is it ok to group two years worth of
> property taxes
> into one year (I'd probably pay this year's late (in January) and next
> year's in
> December when due) ? I understand that I can't just arbitrarily
> deduct 2009
> and 2010 property taxes in 2010, but is it ok if I don't actually pay
> the 2009
> taxes until 2010 ? And I understand there will probably be a small
> penalty
> from the county for my late payment, but the benefit far outweighs it.
>
regardless of whether other deductions are itemized. So the only way
you might benefit is if you will be in a MUCH higher tax bracket in 2010
than in 2009.
And I doubt that any local tax unit penalty will be low enough to make
up for the change in bracket. But it might. The exception (they say)
proves the rule.
ChEAr$,
Harlan Lunsford, EA n LA
Steve Pope
>One thing yet to consider. Remember that we may deduct property taxes
>regardless of whether other deductions are itemized. So the only way
>you might benefit is if you will be in a MUCH higher tax bracket in 2010
>than in 2009.
>And I doubt that any local tax unit penalty will be low enough to make
>up for the change in bracket. But it might. The exception (they say)
>proves the rule.
I've always assumed assesors make the tax payable in an interval
that straddles year-end so as to help out people trying to
fine-tune their deductions.
Mostly interesting to overly wealthy landowners but the rest of
us get to play too.
Steve
Mark Bole
> One thing yet to consider. Remember that we may deduct property taxes
> regardless of whether other deductions are itemized. So the only way
> you might benefit is if you will be in a MUCH higher tax bracket in 2010
> than in 2009.
But only up to $500 ($1,000 MFJ) of real estate tax can be added to the
standard deduction. Even here in California for long-time owners of the
same property, that is typically still much less than the total bill.
-Mark Bole
JGE
Thanks for the re-assurance, folks. Yes, I know about adding $500
of prop tax to standard deduction, and yes, my bill is WAY more than
that.
Now if only I could get the county to refund my 2009 payment. I
promise
to pay it again in 3 weeks, honest !! But I'll know for the
future ...
removep...@yahoo.com
> HLunsford wrote:
> > One thing yet to consider. � Remember that we may deduct property taxes
> > regardless of whether other deductions are itemized. �So the only way
> > you might benefit is if you will be in a MUCH higher tax bracket in 2010
> > than in 2009.
Also, if you expect to be in AMT in 2010 but not 2009, then it's
better to pay 2010 taxes, and maybe even 2008 taxes as in this post
(and maybe even 2007 :), in 2009.
> But only up to $500 ($1,000 MFJ) of real estate tax can be added to the
> standard deduction. �Even here in California for long-time owners of the
> same property, that is typically still much less than the total bill.
--
Avrum Lapin
<483666fb-a37e-4bd6...@k4g2000yqb.googlegroups.com>,
JGE <j...@cs.unc.edu> wrote:
> I have searched and it looks like this is ok. But it hasn't been
> discussed
> in about 5 years (as best I can tell) so I want to make sure they're
> no IRS
> rulings etc, so that people still think it's kosher ...
>
> When bunching deductions, is it ok to group two years worth of
> property taxes
> into one year (I'd probably pay this year's late (in January) and next
> year's in
> December when due) ? I understand that I can't just arbitrarily
> deduct 2009
> and 2010 property taxes in 2010, but is it ok if I don't actually pay
> the 2009
> taxes until 2010 ? And I understand there will probably be a small
> penalty
> from the county for my late payment, but the benefit far outweighs it.
In my county you can make the Dec payment by credit card, paying a small
processing fee and then pay the credit card off when it comes due in
January. The credit card fee ($11) is smaller than the late payment fee
of 10% both of which are smaller than most marginal tax rates.
JGE
> In article
> <483666fb-a37e-4bd6-af35-2f8431d8d...@k4g2000yqb.googlegroups.com>,
>
>
>
>
>
> �JGE <j...@cs.unc.edu> wrote:
> > I have searched and it looks like this is ok. � But it hasn't been
> > discussed
> > in about 5 years (as best I can tell) so I want to make sure they're
> > no IRS
> > rulings etc, so that people still think it's kosher ...
>
> > When bunching deductions, is it ok to group two years worth of
> > property taxes
> > into one year (I'd probably pay this year's late (in January) and next
> > year's in
> > December when due) ? �I understand that I can't just arbitrarily
> > deduct 2009
> > and 2010 property taxes in 2010, but is it ok if I don't actually pay
> > the 2009
> > taxes until 2010 ? � �And I understand there will probably be a small
> > penalty
> > from the county for my late payment, but the benefit far outweighs it.
>
> In my county you can make the Dec payment by credit card, paying a small
> processing fee and then pay the credit card off when it comes due in
> January. �The credit card fee ($11) is smaller than the late payment fee
> of 10% both of which are smaller than most marginal tax rates.
Wow, so it's dated by when you pay the credit card bill, not when you
charged it ?
Arthur Kamlet
I cannot see how you reached that conclusion?
The deduction date is when the charge posted to your credit
card account, and not when you paid the credit card bank.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
D. Stussy
news:hfsb5k$pkm$1...@blue.rahul.net...
> JGE <j...@cs.unc.edu> wrote:
> >I have searched and it looks like this is ok. But it hasn't been
> >discussed
> >in about 5 years (as best I can tell) so I want to make sure they're
> >no IRS
> >rulings etc, so that people still think it's kosher ...
>
> >When bunching deductions, is it ok to group two years worth of
> >property taxes
> >into one year (I'd probably pay this year's late (in January) and next
> >year's in
> >December when due) ?
>
> Yes that's fine. Property taxes, even for future years, are
> deductible when paid.
For an individual (using the cash-basis accounting method), ONE future year
is permitted. Taxes paid more than one year in advance are NOT deductible
when paid.
The rule exists as a result of the difference in fiscal years of most
counties not being on the calendar year.
Steve Pope
>"Steve Pope" <spo...@speedymail.org> wrote in message
>> Yes that's fine. Property taxes, even for future years, are
>> deductible when paid.
>For an individual (using the cash-basis accounting method), ONE future year
>is permitted.
When was this changed?
Steve
Alan
> D. Stussy<rep...@newsgroups.kd6lvw.ampr.org> wrote:
>
>> "Steve Pope"<spo...@speedymail.org> wrote in message
>
>>> Yes that's fine. Property taxes, even for future years, are
>>> deductible when paid.
>
>> For an individual (using the cash-basis accounting method), ONE future year
>> is permitted.
>
> When was this changed?
>
>
> Steve
>
taxpayer can not deduct taxes paid unless the tax is determinable
as to amount and fact of assessment. You can't just pick an
amount, pay it and get to deduct it. There are also numerous
rulings on prepayments that generally (there are exceptions)
limit a taxpayer to what is known as the one year rule. So.. if
you have been assessed your property taxes (you got a bill), you
can pay it and deduct it. There was a thread on this a while
back, and there were some jurisdiction that sent a bill at the
end of the year for the next year and the current year was not
yet delinquent. That put the maximum at two years for that
specific jurisdiction.
The applicable code section and paragraphs are in Sec. 461 of the
IRC.
Wallace
"Arthur Kamlet" <kam...@panix.com> wrote in message
news:hfu81h$491$1...@reader1.panix.com...
I thought with credit card charges, you could do it either way.
HLunsford
> "Arthur Kamlet" <kam...@panix.com> wrote in message
>> I cannot see how you reached that conclusion?
>>
>> The deduction date is when the charge posted to your credit
>> card account, and not when you paid the credit card bank.
>
> I thought with credit card charges, you could do it either way.
>
Nope, it's date of payment which counts.
--
Holiday ChEAr$!
Harlan Lunsford, EA n LA
--
Arthur Kamlet
HLunsford <hlun...@bellsouth.net> wrote:
>Wallace wrote:
>> "Arthur Kamlet" <kam...@panix.com> wrote in message
>
>>> I cannot see how you reached that conclusion?
>>>
>>> The deduction date is when the charge posted to your credit
>>> card account, and not when you paid the credit card bank.
>>
>> I thought with credit card charges, you could do it either way.
>>
>Nope, it's date of payment which counts.
Harlan
Is that something for property payments but not,ay,medical expense
payments?
I always learned it's the sate the charge posts to your credit card
account, and not the date you pay off the credit card, which could be
years from now.
Or am I just misunderstanding you?
For medical expense payments, here is from Pub 502 page 3
Begin Quote:
If you use a credit card, include medical
expenses you charge to your credit card in the year the
charge is made, not when you actually pay the amount
charged.
http://www.irs.gov/pub/irs-pdf/p502.pdf page 3
End Quote
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
--
HLunsford
> In article <hg0q8r$lqd$1...@news.eternal-september.org>,
> HLunsford <hlun...@bellsouth.net> wrote:
>> Wallace wrote:
>>> "Arthur Kamlet" <kam...@panix.com> wrote in message
>>>> I cannot see how you reached that conclusion?
>>>>
>>>> The deduction date is when the charge posted to your credit
>>>> card account, and not when you paid the credit card bank.
>>> I thought with credit card charges, you could do it either way.
>>>
>> Nope, it's date of payment which counts.
>
> Harlan
>
> Is that something for property payments but not,ay,medical expense
> payments?
>
> I always learned it's the sate the charge posts to your credit card
> account, and not the date you pay off the credit card, which could be
> years from now.
>
>
> Or am I just misunderstanding you?
>
>
payments or medical payments.
--
Holiday ChEAr$!
Harlan Lunsford, EA n LA
--
Arthur Kamlet
HLunsford <hlun...@bellsouth.net> wrote:
>Arthur Kamlet wrote:
>> In article <hg0q8r$lqd$1...@news.eternal-september.org>,
>> HLunsford <hlun...@bellsouth.net> wrote:
>>> Wallace wrote:
>>>> "Arthur Kamlet" <kam...@panix.com> wrote in message
>>>>> I cannot see how you reached that conclusion?
>>>>>
>>>>> The deduction date is when the charge posted to your credit
>>>>> card account, and not when you paid the credit card bank.
>>>> I thought with credit card charges, you could do it either way.
>>>>
>>> Nope, it's date of payment which counts.
>>
>> Harlan
>>
>> Is that something for property payments but not,ay,medical expense
>> payments?
>>
>> I always learned it's the sate the charge posts to your credit card
>> account, and not the date you pay off the credit card, which could be
>> years from now.
>>
>>
>> Or am I just misunderstanding you?
>>
>>
>Yep. Date of payment is the date charged on the card, whether tax
>payments or medical payments.
OK, we're in sync and all remains right with the world.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
--
Wallace
"HLunsford" <hlun...@bellsouth.net> wrote in message
news:hg0q8r$lqd$1...@news.eternal-september.org...
> Wallace wrote:
>> "Arthur Kamlet" <kam...@panix.com> wrote in message
>
>>> I cannot see how you reached that conclusion?
>>>
>>> The deduction date is when the charge posted to your credit
>>> card account, and not when you paid the credit card bank.
>>
>> I thought with credit card charges, you could do it either way.
> Nope, it's date of payment which counts.
Thanks for clarifying. My memory must have faded. You can do it either
way, if you pay in year one with a credit card, or in year two, paying
without the credit card. Either way, you are out the cash in year two.
Seth
>Yep. Date of payment is the date charged on the card, whether tax
>payments or medical payments.
That's the date _I_ charge it on the card, not the date the bank
charges to my account, right? (That would make it similar to mailing
a check.)
Seth
HLunsford
>
> That's the date _I_ charge it on the card, not the date the bank
> charges to my account, right? (That would make it similar to mailing
> a check.)
yep, as identified on your MasterCard statement as "transaction date."
--
Holiday ChEAr$!
Harlan Lunsford, EA n LA
--
Seth
HLunsford <hlun...@bellsouth.net> wrote:
>Seth wrote:
>
>> That's the date _I_ charge it on the card, not the date the bank
>> charges to my account, right? (That would make it similar to mailing
>> a check.)
>
>yep, as identified on your MasterCard statement as "transaction date."
That is often not the date that I make the charge. When I check out
of a hotel on Sunday, that's often Monday; except in foreign hotels,
when it's generally whichever date over the next few weeks has the
worst exchange rate.
Seth