Jackson County Treasurer’s Office, like many across the country, has been experiencing an increase in the property owners prepaying their property taxes in recent days.
That’s because the new tax bill, passed by Congress and signed into law by President Donald Trump on Friday, imposes a $10,000 limit on the combined sum of property and state and local income taxes that a household can deduct. The $10,000 cap will help pay for corporate and personal tax cuts totaling $1.5 trillion over the next decade, the AP reported. The changes go into effect Jan. 1.
Jackson County Treasurer Roger Hurt said his office has fielded more calls and processed more property tax prepayments this week than in previous years.
“We’re receiving a flood of prepayments,” he said Wednesday morning.
Hurt, who is finishing the first year of his first four-year term, said his office is processing an average of $14,500 in payments per day. By comparison, the office processed an average of $9,000 per day this time of the year in 2016 and 2015. Hurt said he expects the trend to continue the rest of the week.
“I anticipate tomorrow (today) and Friday to be as much if not more,” he said.
Hurt said his office doesn’t have an budget for overtime and won’t be open late. Payments will only be accepted until 4:30 p.m. Friday when the courthouse closes. He said the office won’t be able to accept post dated payments.
“Friday is going to be the cutoff and we’re unable to make additional accommodations,” he said. “We’re going to try to accommodate what we can with the final days we have available.”
Since a national income tax was permanently put in place in 1913, people have been allowed to deduct from their income the amount they’ve paid for state and local taxes including property taxes. The new cap is going to hit hard in states such as California, Connecticut, New York and New Jersey — states where the average state and local deductions in 2015 all topped $17,000.
The tax bill nearly doubles — to $24,000 — a family’s standard deduction, which goes to taxpayers who don’t itemize their deductions. So there would automatically be fewer people who would deduct their state and local taxes, the AP reported. But in addition, many households in high-tax states could no longer itemize their deductions because of the new cap on state and local taxes.
It’s not clear what deductions the IRS will accept in the coming year. The new law specifically bars taking deductions for income taxes paid ahead of time, but it is silent on prepaid local property taxes.
Hurt said people have also contacted his office for information about tax bill. He said callers should know his office is only able to handle payments and will not offer tax advice to those who call.
“The first thing you should do is call your accountant to see how this will affect you,” he said. “We’re just the collectors of taxes, we’re not advisors in any way.”
Karen Grindlay, a CPA with Grindlay and Grindlay in Seymour, said it would be difficult to determine whether prepaying property taxes would be beneficial for those Jackson County residents who itemize deductions.
“It’s a tricky proposition because of everything that happens in a tax return and everyone needs to talk to their personal accountant,” she said. “It really comes down to being situational.”
Most of the prepayments have come through the county’s online and toll-free phone payment system, Hurt said. He said that was unusual for the end of the year.
“That’s normally a dormant system this time of the year,” he said of the online system. “I have noticed it last week, the last few days and what has been hit this morning.”
Hurt said he was unsure how many Jackson County residents itemize their taxes, but the AP reports that nearly a third of Americans have enough expenses to itemize their deductions. Those who use the standard deductions are unaffected by the bill.
Hurt said his office was prepared for the increases following the passage of the bill based off of conversations he has had with other county treasurers and information sent out by the Indiana County Treasurers’ Association.
Residents who wish to prepay first need to call the treasurer’s office for information regarding prepaying property taxes.
“They actually have to call the office unless they know what they paid last year and they want to pay it,” he said. Once the amount is determined, payments can be made in the office or log onto jackson-tax.net/ to make a payment online. For questions about prepaying, residents can call the treasurers office at 812-358-6125.