file photo by Boyd Loving
December 26,2017
the staff of the Ridgewood blog
Ridgewood NJ, Under the new tax bill, deductions for property tax payments and other so-called SALT deductions will be limited to $10,000. That’s going to hurt in Ridgewood and most of New Jersey.
The decision to prepay your Feb. 1, 2018 real estate tax bill by the end of December is predicated on whether you are subject to the Alternative Minimum Tax (AMT)for 2017, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Eatontown.
“If you are subject to the AMT, then any additional real estate taxes paid will not reduce your federal income tax at all as for AMT purposes, real estate taxes are not allowed,” Becourtney said.
He said the additional real estate tax payment will lower your regular tax, but the AMT liability will be unchanged — thus your tax liability will be unchanged as you pay the higher of the regular tax or the AMT.
The AMT is quite complex, Becourtney said.
If you were subject to the AMT for 2016 and your overall income and deductions are comparable for 2017, you are probably going to be to AMT again, he said.
