Prepaying property tax

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Submitted by bewildering on December 2, 2017 - 10:27pm

So the GOP plan is going to get rid of itemizing my taxes next year.

Does anyone know if I can prepay my property taxes due to San Diego in April 2018? I have an escrow account with my loan servicer.

Submitted by SK in CV on December 21, 2017 - 12:51pm.

ltsdd wrote:
SK - I have yet to be able to demonstrate that I spend >=750 hours/year managing the props. So it's been counted as passive income instead of a business. Am I missing something?

Flu - I hope you're right. The new tax "law", from what I have read, only mentioned the $10K cap. I interpreted that as a hard cap on how much you can deduct regardless of income or other expenses incurred wrt the rentals. For example, if the rental generates $15k in rents and the interest for the rental is also $15k, your taxable income will be $5k instead of $0 as it has been in the past.

Rental income is passive, regardless of how many hours you spend on it. It's still business income.

The state and local income tax limit only applies to itemized deductions. Has nothing to do with business deductions.

Submitted by gzz on December 21, 2017 - 8:17pm.

You can always make a direct property tax payment online with the county.

At some point I may get one of those credit cards that gives you tons of points if you spend $10,000 in the first three months. I don't spend that much normally, however using the card to pay $2500-5000 in property tax, while involving a credit card fee of about 2%, could still easily be worth it.

I tend to get Southwest and Delta credit cards because those miles are worth the most to me. The last few southwest cards I signed up for I got 50,000-80,000 in SW points as sign-up bonuses. At southwest's 2.1 cent per mile conversion rate, that means the 80,000 mile signup bonus is worth about $1600. Paying a credit card fee of about $100 to prepay $5,000 in property taxes, I would still come out way ahead.

As someone mentioned, when the escrow company gets the tax bill and sees it mostly/entirely paid already, they only pay what is due and at the end of the year will send you a check from the escrow account that will give you back what you prepaid.

At some point I am going to take a business class trip to probably Singapore for an Asian vacation using these credit card bonus miles, something that normally costs $3000-6000.

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