The overhaul of the federal tax code signed into law by President Trump is fueling a frenzy of people rushing to pay their property taxes early.
While the invoices for the first half 2018 taxbills won't arrive in mailboxes until early January, the Lucas County Treasurer's office is seeing a surge in property tax prepayments before 2018 in an effort to cash in on a deduction that the coming tax overhaul will limit.
Chief Deputy Mark Austin said the office also is fielding calls from people who want to pay their taxes before the office closes at 5 p.m. Friday.
"Every year we get people who come to the office to pay early because they may be wintering in a warmer climate. But this year the number of people has increased substantially because they want to take advantage of the change in the tax law and prepay their taxes early," he said.
The spike in people wanting to pay early is playing out in tax offices across Ohio and the country, especially in states with high property values such as New York, New Jersey, and California.
Speaker of the House Paul Ryan, R-Wis., right, shakes hands after presenting a pen to House Ways and Means Committee Chairman Kevin Brady, R-Texas, left, as Senate Majority Leader Mitch McConnell, R-Ky., second from left, watches after signing the final version of the GOP tax bill during an enrollment ceremony at the Capitol in Washington, Thursday, Dec. 21, 2017.
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The new Republican-sponsored tax reform puts a $10,000 cap on the combined itemized deduction for state, local, and property taxes.
People who typically deduct more than $10,000 are among those trying to pay their taxes early, to take advantage of the existing law, before the new one kicks in on Jan. 1.
On Thursday, Fred Kvasnicka stood in line at the treasurer's office in One Government Center to pay the entire 2018 tax bill for his Springfield Township home. He said he typically would wait until the current year to satisfy his tax obligation, but the incentive to pay early is just too lucrative to pass up.
"In order to take the deduction I have to pay for it this year," he said. "I got to take the deduction while I still can."
He said he plans to itemize deductions for 2017 for him and his wife and in future years use the standard deduction to reduce their taxable income by $24,000 instead of the current $12,700.
The Wood County Treasurer's office also felt an increase in early taxpayers filing through the doors of its office in Bowling Green.
"We typically get people who want to pay before the end of the year. But that has magnified because of the change in property tax deduction," said Treasurer Jane Spoerl.
Tax accountant Paul Raye said he is advising clients to prepay next year's property taxes if they think they will exceed the $10,000 deductible threshold for the 2018 tax year.
“I probably have had this conversation at least four times this morning from clients who are looking to do it,” he said.
"If you are going to be affected by the elimination of the deduction there is a benefit to pre-pay it now," added Mr. Raye, who said he plans to visit the treasurer’s office before Friday to pay his property taxes.
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