The State Newspaper: By Bristow Marchant: --Columbia, SC
Here’s how some SC taxpayers think they can beat the system
December 28, 2017 05:45 PM
One part of the new federal tax law is sending some taxpayers rushing to pay their taxes early.
The tax legislation, signed into law last week by President Donald Trump, limits deductions that taxpayers can claim on their state and local taxes, starting in 2018.
That has some taxpayers hoping to pay their 2018 taxes before the end of 2017 and keep the deductions – and not just in higher tax states like New York and California.
In Richland County, 34 taxpayers had offered to pay the treasurer’s office a total of $174,000 on their 2018 taxes, as of close of business Thursday.
“The county doesn’t turn down money,” said Treasurer David Adams. “So we’ll hold it until it’s due.”
But Adams said he is “skeptical” whether those payments will give taxpayers any advantage on their 2018 taxes, when deductions for state income and property taxes will be capped at $10,000. That is because the county won’t assess 2018 taxes until October.
“There is no (property tax) bill right now,” Adams said.
On Wednesday, the IRS issued a clarification that 2018 taxes can avoid the new tax cap only if the property already was assessed in 2017, a requirement S.C. taxpayers are unlikely to meet.
Richland County can process tax payments ahead of time — taking monthly payments from low-income homeowners or businesses with irregular cash flows — and put the money into an escrow account against a property’s estimated tax bill.
But many South Carolina counties aren’t set up to handle those kinds of payments, especially at the end of the year when many other taxpayers are rushing to pay their 2017 taxes.
Lexington County Treasurer Jim Eckstrom said he has fielded about a dozen calls asking how to avoid the cap in recent days. But he says there is no way his office can issue a tax receipt this early.
“Nationally, there’s a lot of confusion,” Eckstrom said. “It’s kind of a perfect storm, passing the bill this late in December.”
The tax plan’s cap on state income and property taxes has been the focus of attention in higher tax states. In those states, many taxpayers will owe much more than the $10,000 cap.
In New York, for instance, Democratic Gov. Gov. Andrew Cuomo issued an executive order to remove any provisions that would stop taxpayers from prepaying their 2018 property taxes.
But at the Richland County taxpayer’s office on Thursday, no one in line to pay their year-end taxes was planning to pay ahead for next year’s taxes, too.
Adams expects few S.C. taxpayers to try.
“First, a lot of people don’t have $7,000 in their mattress to pay,” he said. “And, second, their tax bill’s not going to be over $10,000 anyway.”
Bristow Marchant: 803-771-8405, @BristowatHome, @BuzzAtTheState
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