Prepaying your second tax installments that are due in 2018 could net significant tax savings. A $10,000 federal cap on deductions for state and local taxes goes into effect in 2018. For many this means all or a portion of their property tax will NOT be deductible in 2018. However, if you pay the second installments due in 2018 by December 31, 2017 you can deduct the full amount this year and avoid the $10,000 cap.
Both the IRS and Orange County Tax Collector have said no. The IRS issued an advisory stating ” A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017″. The IRS did however say that property taxes assessed in 2017 but due in 2018 are deductible for 2017 if paid by December 31, 2017.
Additionally, the Orange County Tax Collector has also said that they “are not able to accept any pre-payments for property taxes that have not yet been billed.” The full letter to Orange County residents is below including how to pay your second tax installments by December 31, 2017.
Our office has received a number of inquiries from taxpayers asking if they can prepay property taxes due to the new Federal legislation relating to the deductibility of State and Local Taxes (SALT). In the new legislation, the deductibility of state and local taxes for federal income taxes in 2018 is greatly scaled back. Taxpayers can only deduct up to $10,000 of any combination of property, income or sales taxes. As the average secured property tax bill in fiscal year 2017-2018 is approximately $7,100, and California has both an income tax and sales tax, it is likely that many taxpayers would pay more than $10,000 in SALT next year.
We are not able to accept any pre-payments for property taxes that have not yet been billed. At this time we can only accept payments for the first or second installment of the FY 2017-18 property taxes or any supplemental property taxes already billed and not for any FY 2018-19 property taxes. We also do not accept partial payments of property tax bills. The second installment of secured property taxes is due on February 1 and delinquent if received or postmarked after April 10, 2018. You can pay any outstanding property tax payments prior January 1, 2018 using one of our convenient options:
Online Payments: You can choose the ease and convenience of paying your bill electronically using eCheck (no service fee) or credit or debit card (service fees apply) up to midnight on December 31, 2017 and receive same day credit using our self-service secure website at ocgov.com/octaxbill and receive a detailed receipt (printed or by email). Just enter either your parcel number (APN) or property address in the appropriate field, select the tax bill you want to pay and select the payment method.
Payment by Mail: You can mail your payment using the remittance stub included with your 2017-18 property tax bill and mail your check to the County of Orange, Attn. Treasurer-Tax Collector, P.O. Box 1438, Santa Ana, CA 92702-1438.
Payment by Automated Telephone: You can pay by credit card (service fees apply) using our automated telephone system by calling (714) 834-3411 and following the automated prompt to pay your outstanding property taxes due.
Payment in person: You may also come into our office to pay your property taxes in person at our office at 625 N. Ross Street, Santa Ana (access of Broadway and park at Old Courthouse Lot P5 or Lot P8). See map at http://www.ttc.ocgov.com/howdoi/contact/directions.
Check out your online statement to make sure that you don’t have any outstanding property taxes that can also be paid by December 31, 2017 at ocgov.com/octaxbill. Taxpayers can also view and print previous year property tax bills and view the previous two years of payment detail.
If you have any questions, please e-mail us at firstname.lastname@example.org or call (714) 834-3411 (hours are 9:00 AM to 5:00 PM).
Shari L. Freidenrich, CPA
Office of the Treasurer-Tax Collector County of Orange