Why You May Want to Pay Your Property Taxes Early

Some U.S. states offer discounts if you pay ahead of time!

In the United States, are there any benefits to paying your property taxes early?

Answer. It depends on where you live. Some municipalities shave a percentage off the tax bill for early payments.

Why You May Want to Pay Your Property Taxes Early

Some U.S. states offer discounts if you pay ahead of time

The city “encourages property owners to prepay their taxes by offering prepayment discounts,” he said.

There, homeowners whose properties are worth more than $250,000 pay taxes twice a year, However, taxpayers can get a 0.5% discount if they pay the entire amount at once, instead of in two installments.

The state of Texas allows taxing units to adopt discounts, Municipalities can give a 3% discount if the taxes are paid in October, 2% in November and 1% in December. The deadline to pay the taxes is Jan. 31, in most cases.

Not all taxing units offer the discounts, and the state’s major municipalities do not. But some entities in counties like Kendall and Wilson, both near San Antonio, do offer reduced liabilities for early payment, according to their websites.

Some property taxpayers who pay early may be able to deduct the tax from their federal income tax,

“Taxpayers can accrue their 2020 property tax expenses in 2019,” she wrote in an email. “This is because taxes for 2020 are levied this December, and the tax rate can be calculated after that. So although the mechanical calculation has not occurred, it meets the ‘all-events test’ for federal income tax purposes.”

The all-events test requires that tax expenses must occur before the taxpayer can report an expense on his or her federal income taxes. So if the taxes are paid before the end of the year, the taxpayer can deduct them from that year's income taxes.

Those state-and-local tax deductions are limited to $10,000, however, because of the changes made in the Tax Cuts and Jobs Act of 2017.

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