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Should you prepay your property taxes this year?

For town clerks and county employees, there's a holiday week scramble to set up a first-of-its-kind mechanism for property owners to prepay their 2018 taxes.

For accountants and financial planners, there's a host of questions from their clients about whether this makes sense for them.

And for the rest of us, there's the sorting of the pros and cons of complicated tax issues in just a few short days.

New Yorkers have the chance to prepay some of their 2018 property taxes this year, possibly saving them some money on their 2017 federal taxes.

That's because the new tax reform bill signed into law by President Trump reduces the amount of state and local taxes a person can claim as deductions on his or her 2018 federal tax return and fewer people may itemize deductions on their 2018 return because there's a larger standard deduction.

But the last-minute nature of the changes is leaving some local offices that collect taxes flooded with phone calls and visits from residents.

Marjory Jaeger, the Amherst town clerk, said there was a line of more than a dozen people waiting outside her office when it opened at 8 a.m. Wednesday.

"It taxes our employees, because we are shorthanded," Jaeger said, apologizing for the pun.

How "unprecedented" is this situation, Erie County Executive Mark C. Poloncarz asked at a news conference Wednesday: "When was the last time you had people wanting to pay their taxes early?"

With so much uncertainty swirling around the issue, here are some answers to the basic questions.

What's going on here?

The new tax reform bill signed into law by President Trump introduced a number of changes to the tax code, and prepaying property taxes is one way taxpayers may want to respond. (More on that later.)

Gov. Andrew M. Cuomo signed an executive order late last week making this easier. Erie County was among the governments saying they couldn't accept the advance payments without the order.

County governments then had to issue their own approvals and get bills or tax warrants out to the municipalities within their borders to give property owners the option to prepay.

Which communities are allowing people to prepay their property taxes?

In Erie County, it appears all 25 towns and three cities are doing so. Joseph L. Maciejewski, director of real property tax services for the county, said he's not aware of any holdout communities.

County officials, who worked through the weekend to get the prepayment mechanism in place at the town level by 3 p.m. Tuesday, said one town clerk's office was set to be closed this week because of the holidays but changed its plans because of the tax situation.

Other New York counties also made an effort to accept advance tax payments. Westchester is a notable exception.

You should check with your home community to see if it's allowed.

What about my school district taxes?

You can't prepay your school taxes, which generally are the largest portion of a property tax bill.

School districts operate on a different calendar and budget year than towns and counties and homeowners pay school taxes at a different time of the year.

For that reason, among others, school districts here aren't making this an option.

How does it work?

Generally speaking, communities are allowing people to prepay in person, with a check, or by mailing a check. Few offices we contacted are accepting online or credit card prepayments.

In Erie County, outside Buffalo, you need to go to your town or city offices to pay your town and county taxes.

In Buffalo, you can go to the Rath Building to pay your county taxes, and to City Hall to pick up the payment slip you'll need to pay your city property taxes. Erie County is accepting online payment of county taxes for Buffalo residents.

In Niagara Falls, homeowners can prepay their city property taxes but not their county property taxes.

Niagara Falls accepting prepayments on 2018 property taxes through Friday

And in Chautauqua County, homeowners outside Jamestown can prepay their property taxes in their local community.

Setting up this process has required a lot of jury-rigging on the part of clerk's offices, which are writing out receipts by hand in some cases.

"It's going to be bedlam for all of the tax collectors," said Jim Caflisch, director of real property for Chautauqua County.

What if I don't know how much I owe for 2018?

That's a big issue. In Erie County, the towns have set their property tax rates, but the county hasn't printed and issued the bills yet, clerks said, so they don't know exactly how much to charge.

Some clerks, such as in Cheektowaga, are telling homeowners to pay the same amount as they did in 2017, and the town will make adjustments if necessary when the bill comes out next month.

Others, such as Amherst, are recommending you guess how much you owe in 2018 and the town will figure out how much more you owe, or whether the town owes you a refund, when the bills are printed.

What's the deadline?

For most clerks' and tax offices, the deadline for paying in person is the close of business Friday, Dec. 29.

If you're paying by mail, the prepayment must be postmarked by Sunday. (And that doesn't mean throw it in the mailbox Sunday, when it will be fished out on Tuesday.)

Why would I want to prepay my taxes?

Generally speaking, experts say, the taxes will be more valuable as a deduction in your 2017 tax year than in your 2018 tax year. That's for several reasons:

First, the new tax law lowers the income tax rate for 2018, so you're better off taking the deduction in a year when you pay a higher tax rate, said Larry Lawler, a certified public accountant and enrolled agent with the firm of Lawler & Witkowski.

Next, starting in 2018, the law caps the total amount of state and local taxes — including income and property taxes — that you can deduct at $10,000, for individual or married filers, said Tony Ogorek, founder and CEO of Ogorek Wealth Management. So if you're going to exceed that cap in 2018, you're better off paying the tax and enjoying the benefit of the deduction in 2017.

Finally, and perhaps most importantly, the standard deduction is set to rise in 2018, for individuals to $12,000 and for married couples filing jointly to $24,000, meaning any itemized deductions may be moot for people who would just take the higher standard deduction.

So should I do this?

It depends on your personal situation, of course, and Lawler and Ogorek recommend consulting your own financial planner or tax preparer. But both were bullish on prepaying.

"I think most people should," Lawler said.

If you don't itemize your taxes, however, you won't see the benefit of doing this. If you earn enough money that you're subject to the alternative minimum tax, or AMT, you also wouldn't benefit from prepaying.

But Ogorek did say if you have a vacation home or a second home in another taxing jurisdiction, you should reach out to that community to find out whether you can prepay there, as well.

In Amherst, several hundred people had prepaid by mid-Wednesday morning. In Buffalo, by Wednesday afternoon, the number was 50.

I pay my property taxes through an escrow account. What can I do?

Not much, probably, in this short an amount of time.

Most homeowners with mortgages have escrow accounts, controlled by their mortgage lender, into which money to pay their property taxes is sent on a monthly basis. The lender then pays the tax bill when it's due. Altering those arrangements to prepay the taxes won't be easy in the next couple of days, Poloncarz said.

Homeowners might be able to pay their property taxes this week, and then contact their lending institution afterward to have the automatic payments changed, or credited to reflect the prepayment, Poloncarz said.

Will this even end up helping me?

After all of this effort and trouble, it may not make a difference.

The Washington Post reported Wednesday that the IRS decided taxpayers can claim an additional tax deduction when paying their 2017 federal taxes if they prepay a property tax this year and if their local taxing authority has notified them how much they owe in property taxes.

It wasn't immediately clear late Wednesday how that would impact homeowners who are prepaying an estimated 2018 property tax.

Ogorek, however, said the worst-case scenario is people pay ahead of time a bill they'd have to pay anyway in a few weeks, or months.

"It's not your money, it's their money," Ogorek said. "You're just giving it to them sooner."

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