Q: Are Illinois pre-paid real property taxes over $10,000 fully deductible?
If you're considering buying a home for your family or your business, a skilled Illinois residential and commercial real estate attorney can help you with everything concerning what may be the largest and most important financial transaction of your life. In fact, you should consult an attorney before signing listing agreements or other contracts with the many different players that are involved in real estate transactions, so your interests can be adequately protected.
If you already own real estate, you might have been caught up in the recent frenzy over one part of the latest federal tax reform legislation--namely the new $10,000 cap on real property tax deductions. How the brand-new tax reform laws may affect you can be explained best by consulting an Illinois tax return preparation attorney—even if in the past you’ve used an accountant, tax-prep chain service, or filed your own return.
With the ink barely dry on the massive federal tax reform bill, experts and civilians alike were trying to digest key components and assess what quick action was needed before year-end to maximize and/or preserve tax savings and deductions. This resulted in a rush to pre-pay property tax bills for 2018 before the end of 2017, all over the country—including highly-taxed Illinois.
Whether the pre-paid property tax bills over $10,000 are deductible or only partially deductible will depend on when the local assessor assessed the value of the property. Reportedly, the IRS advises "a prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017". In addition, Illinois counties "differ on how much they allow in pre-payment". So, consulting with an attorney who handles income tax return preparation may be especially prudent in light of the new tax reform legislation.
If you need assistance with a commercial or residential real estate transaction, or with the preparation of your personal or business income tax return, the Law Office of Thomas J. Hansen can help. Contact us today to arrange a consultation.
From our offices in Park Ridge, we assist clients in Cook County, as well as Niles, Des Plaines, Glenview, Norridge, and Rosemont, Illinois.