Town taxes subject to federal deduction cap in 2018
Don’t put off paying this year’s town taxes.
That was a nugget of wisdom mentioned at the Board of Finance meeting on Tuesday night, Dec. 19. “If you can pay them now, you should pay them now,” said town tax collector Jane Berendsen-Hill.
The reason? The final version of the federal tax bill signed into law by President Donald Trump on Friday, Dec. 22, includes a $10,000 cap on state and local tax (SALT) deductions. The cap affects filings, not individual members of a household, so couples filing jointly are together held to the $10,000 limit on state and local deductions.
The cap will go into effect on Jan. 1, according to the text of the new federal tax law.
“You may pay any January and April taxes now,” said Berendsen-Hill in a follow-up email. “These taxes were billed in 2017 and so are eligible.”
She clarified that her office cannot accept payments for taxes that will be billed in the next year. Payments made for next year’s taxes will be returned, she said.
“Any payment will be counted as payments in 2017, if they are in my office by 4:30 on Dec. 29 or by mail if they are U.S.-postmarked before year-end. Metered mail does not count.”
Berendson-Hill said her office has received numerous inquiries about pre-paying 2018 taxes before the new year.
“You’ll have a distortion in December — all these people frantically running around trying to pay taxes through June,” she said at the Dec. 19 meeting.