Author photo

By Karla Pomeroy
Editor 

No rush on paying taxes in Big Horn Basin

WORLAND — Those who itemize are trying to get the most out of the current tax plan. Many residents across the country were hurrying this week to pre-pay state and local taxes before the new tax plan goes into effect Jan. 1, but county treasurers around the Big Horn Basin have not seen a rush to pay property taxes in full.

 

December 30, 2017



WORLAND — Those who itemize are trying to get the most out of the current tax plan. Many residents across the country were hurrying this week to pre-pay state and local taxes before the new tax plan goes into effect Jan. 1, but county treasurers around the Big Horn Basin have not seen a rush to pay property taxes in full.

The federal tax overhaul signed by Republican President Donald Trump last week puts a new $10,000 limit on deductions for state and local taxes, according to the Associated Press.

Larry Heiser, Worland certified professional accountant and professional financial specialist, said the limitation has created mass amounts of confusion. “It’s only talking about individuals who can itemize. The property tax change does not apply to someone in business.”

He added, “I don’t know how many calls I’ve been getting from businesses concerned that they are not going to be able to deduct property tax. The $10,000 limit is for only those who itemize, and does not apply to people in businesses. That has been the biggest question, the issue I’ve received the most calls about.”

So why the fuss about paying taxes early? Heiser said by paying now, people who may pay the second half of their 2017 taxes in 2018, it will help with deductions for their 2017 taxes.

At issue, he said is that there is a standard deduction every taxpayer gets. A couple in 2017 gets a standard deduction of $12,700. That standard deduction is going to double in 2018 under the new tax plan to $24,000, which is why most people are not going to be able to itemize, they won’t have more than $24,000 in deductions when they combine property tax, license fees, mortgage interest and charitable contributions.

Heiser said if they pay all of their 2017 taxes this year, it may help them get over the $12,700 threshhold that is in place for 2017.

The Internal Revenue Service issued guidance this week to help homeowners figure out if they can save money by paying next year’s local property taxes early in order to claim deductions on this year’s taxes.

The IRS said Wednesday that some homeowners who pay real estate taxes early will be able to claim the deduction, but only if the taxes were assessed, billed and paid in 2017. The IRS says people can’t guess at what next year’s assessment might be, pay that amount ahead of time and still get the deduction.

While Wyoming does not have state or local income tax to deal with, many do pay property taxes in full by Dec. 31 for tax deductions.

NO RUSH AT COUNTY OFFICES

Washakie County Treasurer Doris Kern said people can pay half of their 2017 property tax bill by Nov. 10, 2017, and the second half by May 10, 2018, or they can skip the first half deadline and pay the full amount by Dec. 31, 2017.

She said they always have people and companies paying the taxes at the end of the year.

This year, she said, they have fielded a lot of questions within the past week about people asking if they can pay 2018 taxes. The answer is no since 2018 taxes have not been assessed.

Hot Springs County Treasurer Julie Mortimore said she knows several counties have gotten hit with people wanting to pay 2018. She reiterated what Kern said, “Wyoming can’t do that because the taxes are not assessed until 2018, which is one of the reasons the IRS issued guidelines this week.”

Mortimore said she hasn’t fielded many questions. While, they usually have a lot of ranchers pay their property tax bill in full in December, she did have one customer come in this week and pay the second half of the bill, just for the tax deduction.

On Tuesday, she said she also had one customer come in and immediately pay the sales tax on a new vehicle, even though she still had plenty of time before the tax was due.

“I didn’t realize how lucky we are. Some treasurers have been slammed,” Mortimore said.

Park County Treasurer Barb Foley said her office has fielded a few questions this week and they advise people to consult an accountant. “We don’t want to give them advice. We, in Wyoming don’t have the capability to pre-pay taxes, so we suggest they can pay the second half of their [2017] taxes, which are due May 10. That’s the only benefit we have.

Big Horn County Treasurer Becky Lindsey said her office has had the same experience, with not noticing much difference in the number of residents paying taxes this week.

Like others they have fielded calls about pre-paying 2018, and the county residents are told about the IRS guidelines and that the 2018 taxes have not been assessed.

Lindsey said they do have a few taxpayers who typically pay taxes in full at the end of the year. She noted one back with most of the mortgages in the area pays taxes in full in December every year.

OTHER ISSUES

Heiser said one issue people will need to consider next year is the elimination of the personal exemption. Under the new tax law there will not be a personal exemption.

“People with a lot of children, that won’t be very positive for them,” Heiser said.

One other item of note for Heiser — “They started out saying you can file on a postcard, but after all the special interests, that postcard has to be 2 feet by 3 feet. There is no simplification to this plan.”

DEDUCTIONS

According to the AP, the new tax plan signed by President Donald Trump last week includes the following changes:

—Standard deduction: Used by about 70 percent of U.S. taxpayers, currently $6,350 for individuals and $12,700 for married couples. The bill doubles those levels to $12,000 for individuals and $24,000 for couples, expiring in 2026.

— Personal exemption: The bill ends the current $4,050 personal exemption.

— State and local taxes: Ends the unlimited federal deduction for state and local income and sales taxes, allowing the deduction only for a total of up to $10,000 in combined property, income or sales taxes.

— Home mortgage interest deduction: Limits the deduction to interest paid on the first $750,000 of a new loan for a first or second home. The current limit is $1 million.

— Other deductions: Allows deduction for medical expenses not covered by insurance for 2018 and 2019 when expenses exceed 7.5 percent of adjusted gross income. That rises to 10 percent starting in 2020.

—Tax credits: Doubles per-child tax credit to $2,000 for families making up to $400,000 a year. Up to $1,400 of the $2,000 credit is available as a tax refund to lower- and middle-income families with relatively small tax bills.

The per-child credit expires in 2026. The bill also provides a tax credit for dependent care for children and older dependents; it retains the current adoption tax credit.

 
X
 

Powered by ROAR Online Publication Software from Lions Light Corporation
© Copyright 2024

Rendered 02/04/2024 09:05