February 10,2018
the staff of the Ridgewood blog
Ridgewood NJ, In Ridgewood, there was a mad dash to pre pay property taxes due to the new federal tax law changes . The Village collected $21 million in last minute prepayments at the end of 2017. At last weeks Village council meeting a resolution was drafted to honor refund requests for payments toward the third and fourth quarters of 2018.
According to chief financial officer Bob Rooney, he had received “10 or 15” requests for refunds, but that “when I get around April, I might have a lot more.” He said 27 percent of the $21 million in prepayments were for the second half of the year.
At issue is a Dec. 27 IRS advisory saying payments for the second half of 2018 may not qualify for a deduction, because only “assessed” taxes could be prepaid. Since municipal tax years run through June, the third and fourth quarters could be considered not-yet-assessed.
Near by Glen Rock took in $9.6 million in 2018 property tax prepayments, but Mayor Bruce Packer, has said his council decided not to offer refunds, and had warned the public of this stance last year.
IRS Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017
IR-2017-210, Dec. 27, 2017
WASHINGTON – The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.
The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.
The following examples illustrate these points.
Example 1: Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018. On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a deduction for this prepayment on the taxpayer’s 2017 return.
Example 2: County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017 – June 30, 2018. County B intends to make the usual assessment in July 2018 for the period July 1, 2018 – June 30, 2019. However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018.
The IRS reminds taxpayers that a number of provisions remain available this week that could affect 2017 tax bills. Time remains to make charitable donations. See IR-17-191 for more information. The deadline to make contributions for individual retirement accounts – which can be used by some taxpayers on 2017 tax returns – is the April 2018 tax deadline.
IRS.gov has more information on these and other provisions to help taxpayers prepare for the upcoming filing season.
Good for Glen Rock for not offering refunds.
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That’s the only way those knee-jerk fools who pre-paid a full year of taxes based on the “advice” of a “friend of a friend who heard about it on the internet” will ever have any chance of learning that actions have consequences and a little thought is required before action.
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Too bad Ridgewood continues to reward idiotic behavior.
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Talk about honor are you kidding me. I’m a resident in the borough of Glenrock for 37 years. The past 30 years the village and Glenrock have had a shared services with grinding leaves in yard waste throughout the year, whatever happened to that. Nothing was brought to any council meetings in the borough of Glenrock that I know about, I’ve been attending council meetings for 20 years what the hell is going on in Ridgewood. I have asked this question to borrow members and they say we don’t know we’re in limbo. My god what is going on in Ridgewood kid you get your daily business in order. The bar of Glenrock just shelled out a good $30,000 for an outside contractor to come in and handle the leaves from the past fall that’s our tax money that went down the t The bar of Glenrock just shelled out a good $30,000 for an outside contractor to come in and handle the leaves from the past fault that our tax money that went down the The tubes that was never voted for, talk about a waste of tax money. First the water department , now that the public public works what’s next surprises surprises. You people are not nice terrible what goes on.
Well who authorized this to have stopped shared services between Glenrock and the village after 30 years of being a partner. Someone how to make this decision. I’m sure they had to be some kind of talks between The mayors and counsel. I’m sure this could not just be one person making this decision couldn’t we just don’t know.
It was very clear that the actual assessments were in scope. The idle class on line were clueless. Nonetheless it is generous of the village to offer refunds.
Yes waste of money !!
The individual who said that it had to have been discussed had high hopes. At this point there is a whole list of things that “should have been discussed by more than one person.” Ridgewood’s latest actions seem to have been thought up and then initiated without any discussion on them. Such as the absolutely marvelous idea to waste more tax money on software that will enable residents to dissect their water bills on their smart phone. I’m sure that this will be used daily by many residents! NOT!!!