Gov. Chris Christie’s administration is requiring New Jersey municipalities to accept payments for 2018 property taxes and credit them as received in 2017 as long as payments are postmarked by Dec. 31, 2017. Homeowners in some cities and towns have been prepaying their 2018 property taxes after changes in the federal tax reform enacted last Friday cap the amount of state and local taxes that can be deducted at $10,000, starting in 2018.
The Borough of Highland Park, even prior to the governor’s executive order, has been accepting prepayment of 2018 taxes. While borough officials encourage residents to consult a tax accountant before making a decision about the tax advantages of prepayment, the borough has released details on how to proceed with prepayment.
The borough encourages property owners to pay in person at Borough Hall, 221 South Fifth Avenue, Highland Park, NJ. Since Borough offices are closed on Saturday and Sunday, the payment must be received by Friday, Dec 29 in order to be processed and count towards 2017. At this point, borough officials advise against sending in payment via the postal service. Residents can determine the amount of their 2018 first and second quarter tax payments by checking out the online payment link at the borough website: www.hpboro.com
Any questions regarding the amount of prepayment or the process should be emailed to the borough tax clerk: firstname.lastname@example.org.
According to the Internal Revenue Service (as reported by www.nj1015.com), property taxes can be tax deductible, unlike prepaid income taxes, but only if the taxes were assessed during 2017. Prepayments of not-yet-billed 2018-2019 property taxes, covering the second half of 2018, would NOT be deductible.
The new federal tax law caps state and local tax (SALT) deductions at $10,000. The SALT cap is expected to significantly reduce the number of taxpayers who itemize their deductions, as the $10,000 limit combined with other deductions, such as for mortgage interest, is less likely to top the standard deduction, which nearly doubles to $24,000 for a married-couple household.
Zillow projects that the share of homes where deductibility makes sense will drop in every county – including from 90 percent of homes to 19 percent in Middlesex County.