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Prepayments pose tax puzzle for Connecticut


That law caps real estate and motor vehicle property tax deductions at $ ... an opinion as to the federal tax treatment of property taxes made in December, 2017, to Connecticut local governments. Furthermore, OPM does not have a role in the supervision ...


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By Michael PMayko Updated 7:03 pm, Thursday, December 28, 2017 27, 2017The new federal tax overhaul that curbs how much homeowners can deduct for property taxes has many residents inquiring whether they can prepay their future taxes to avoid the hitPhoto: Christian Abraham / Hearst Connecticut Media / Connecticut Post" class="landscape" /> 27, 2017The new federal tax overhaul that curbs how much homeowners can deduct for property taxes has many residents inquiring whether they can prepay their future taxes to avoid the hitPhoto: Christian Abraham / Hearst Connecticut Media / Connecticut Post" class="landscape" /> window._taboola = window._taboola || []; _taboola.push({ mode: 'thumbnails-c', container: 'taboola-interstitial-gallery-thumbnails-3', placement: 'Interstitial Gallery Thumbnails 3', target_type: 'mix' }); _taboola.push({flush: true}); 27, 2017The new federal tax overhaul that curbs how much homeowners can deduct for property taxes has many residents inquiring whether they can prepay their future taxes to avoid the hit."> 27, 2017The new federal tax overhaul that curbs how much homeowners can deduct for property taxes has many residents inquiring whether they can prepay their future taxes to avoid the hit."> Photo: Christian Abraham / Hearst Connecticut Media Image 1of/3 CaptionClose Image 1 of 3 Buy photo Milford residents wait in line to pay their taxes at the Parsons Government Complex in Milford, Conn., on Wednesday, Dec27, 2017The new federal tax overhaul that curbs how much homeowners can deduct for property taxes has many residents inquiring whether they can prepay their future taxes to avoid the hitless Milford residents wait in line to pay their taxes at the Parsons Government Complex in Milford, Conn., on Wednesday, Dec27, 2017The new federal tax overhaul that curbs how much homeowners can deduct for ..more Photo: Christian Abraham / Hearst Connecticut Media Buy this photo Image 2 of 3 Buy photo Milford residents wait in line to pay their taxes at the Parsons Government Complex in Milford, Conn., on Wednesday, Dec27, 2017The new federal tax overhaul that curbs how much homeowners can deduct for property taxes has many residents inquiring whether they can prepay their future taxes to avoid the hitless Milford residents wait in line to pay their taxes at the Parsons Government Complex in Milford, Conn., on Wednesday, Dec27, 2017The new federal tax overhaul that curbs how much homeowners can deduct for ..more Photo: Christian Abraham / Hearst Connecticut Media Buy this photo Image 3 of 3 /**/ Prepayments pose tax puzzle for Connecticut 1 / 3 Back to Gallery /**/ Residents attempting to prepay their yet-to-be billed July 1, 2018, property taxes in order to claim those deductions on their 2017 federal returns might be in for a rude awakening. “In keeping with city policy, the city will accept early payments for property taxes,” a news release from Stamford Mayor David Martin’s office reads“However, the city cannot, and does not, provide any assurance or opinion that the IRS will allow these payments to be deductible on federal income taxes for the calendar year ending on Dec31, 2017.” While Stamford is accepting prepayment, most area tax collectors offices are not. “We’ve had people coming in and asking about this,” said Lisa Theroux, Shelton’s tax collector“We’ve gotten a lot of phone calls about this.” So many calls that Theroux and other collectors have either put messages on their phones or issued explanatory notices on their municipal websites. Related Stories Dan Haar: Prepaying tax chaos strikes state Like most tax collectors, Theroux, Johanna Figueroa of Ansonia and Dana Flach of Seymour explained that since their municipalities have not set a mill rate, no tax bills have been computedAnd since no tax bills have been computed — there’s no authorization to accept them. As a result, most tax collectors said they are only accepting payments on tax bills due Jan1 or in some towns, like Fairfield and Westport (which offers four installments, with the last bill due April 1)However those payments are all for the current fiscal year and can be deducted on the 2017 federal income tax returns. Edward Snyder of New Haven was frustrated when he learned that officials in the city’s tax offices weren’t taking prepayments of 2018 taxes. More Information Here are the office hours for area tax collectors on Dec29Some municipalities allow tax payments to be made online with a credit cardResidents should check with their local tax collector’s office or consult the municipalities website.ANSONIA - Closed FridayBRIDGEPORT - 9 a.mto 4 p.m.DERBY- 8:30 a.mto 12:30 a.m.EASTON - 8:30 a.mto 4:30 p.m.FAIRFIELD - 8:30 a.mto 4:30 p.m.GREENWICH - 8:30 a.mto 3:30 p.m.MILFORD - 8:30 a.mto 4:30 p.m.MONROE - 8:30 a.mto 11:30 a.m.OXFORD - 8 a.mto 4 p.m.SEYMOUR - 8 a.mto noonSHELTON - 8 a.mto 5:30 p.mSTAMFORD - 8:30 a.mto 4 p.m.STRATFORD - 8 a.mto 4 p.m., Saturday, Dec30 9 a.mto noonTRUMBULL - 9 a.mto 5 p.m.WESTPORT - 8:30 a.mto 4:30 p.m. ”It’s only a one time thing, but the city should have stepped up to accommodate people who want to do this,” Snyder said. All of this confusion and concern stems from the new federal tax laws taking effect for 2018That law caps real estate and motor vehicle property tax deductions at $10,000. More than likely that’s going to impact many taxpayers who own more than one home and car -- or one very expensive home. Fairfield Tax Collector David Kluczwski said at least 50 residents have asked about prepaying the next fiscal year taxesHis town also accepts payment for taxes due April 1, but those bills apply to the current fiscal year. On Wednesday afternoon a line of people flowed out the Milford tax office into the hallway while offices in Ansonia, Derby and Shelton had no waitsLines in the New Haven tax office were more than a dozen people deep for much of Thursday afternoon. Additionally some tax collectors said payments sent through the mail using checks dated and showing envelopes postmarked by Dec31 are usually allowed to be deducted. If all this isn’t taxing enough, Seymour Tax Collector Dana Flach has been confronted with another issue. Her office and probably others had to deal with taxpayers wanting to personally prepay residential taxes they owed Jan1, instead of allowing their mortgage holder to use the funds being held in escrow. Flach said she’s advising taxpayers to come back with a permission letter from their mortgage holder. Still, that could create an Excedrin headache for municipalitiesWhat happens when one payment is made by the taxpayer using their personal funds and a duplicate payment is made between Jan1 and Feb1 by the mortgage holder using the escrow funds? Are those duplicate funds refunded? To whom? Or are they applied to future taxes? All the confusion led Ben Barnes, the secretary of the state’s Office of Policy and Management, to email municipal chief executives encouraging them to advise their taxpayers of the local policy and procedure. In the email, Barnes said his office “is in no position to offer an opinion as to the federal tax treatment of property taxes made in December, 2017, to Connecticut local governmentsFurthermore, OPM does not have a role in the supervision of local tax collection beyond a role in the certification of tax collectors.” Barnes said prepayment of Jan1 bills and supplemental motor vehicle bills by Dec31, “appears to be a lawful way to take advantage of the expiring deduction.” Any taxpayers who have prepayment questions should consult their tax preparer or accountant. And anyone upset by this should contact their U.SRepresentatives and Senators. 

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