My property tax is invoiced in July for payments in July and December, so for the July 2017 - June 2018 fiscal year, I made my regular payments in July and December 2017. I don't have an escrow account - I pay my own property tax and homeowner's insurance.
I won't receive my next property tax invoice until July 2018 for the July
2018 - June 2019 fiscal year. However, I know to the penny the amount I will be billed, assuming the county does not change my property tax rate.I'm going to call my county on Tuesday and ask if I can prepay my July
2018 - June 2019 property tax by December 31, 2017 if I identify my payment for the July 2018 - June 2019 fiscal year.I also plan to prepay my January 1, 2018 mortgage payment by December 31,
2017 to have a 13th monthly mortage interest payment in 2017.This way I can deduct the additional property tax and mortgage interest at my higher marginal 2017 tax rate.
I will also get a refund on my state income return but have them apply it toward my 2018 income tax withholding.
My 2018 state/local/property tax deduction will then be $10,000 based only on my state/local tax withheld, still less than my state/local tax. I'll owe the state the additional income tax on the lower state deduction not having any property tax to pay, but the 2017 refund cancels this out. In
2018, I'll owe the federal income tax on the 2017 state tax refund, pretty small.I'll continue to pay my January mortgage payment in late December each year from here on out.
The way I see it, I'm ahead by the 2017 marginal federal tax rate on the
2018 property tax and January 2018 mortgage interest deductions, minus the small additional tax on the 2017 state tax refund.Comments?