Thousands of property owners in San Luis Obispo County rushed to pay their 2017-18 taxes and pre-pay 2018-19 taxes in December in the last few days before the new federal tax law went into effect.
“The county saw a nearly 400 percent increase in tax payments in the last five business days of 2017 compared to the prior year. Tax payments went up to about 8,500, compared to about 1,800 in 2016,” according to a statement issued by County Tax Collector James Erb.
They were trying to save money by taking advantage of retired federal tax deductions.
Beginning in 2018, couples filing jointly will be limited to an annual combined deduction of no more than $10,000 in state and local income, sales and property taxes.
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The change mostly affects taxpayers that have above-average incomes and property values.
Erb said that some taxpayers attempted to pre-pay 2018-19 taxes at the end of 2017 by guessing the amounts.
Unfortunately for them, the IRS issued a ruling that future years’ taxes cannot be deducted from federal income taxes before the taxes are assessed.