A jump-start on paying taxes
SUFFOLK COUNTY—Many residents from both the Town of Brookhaven and the Town of Islip ended the previous year rushing to pay the second half of their 2018 taxes early. This all came in the wake of the GOP tax bill passed by Congress and signed into law by President Donald Trump last month.
Brookhaven receiver of taxes Louis Marcoccia said there was “no question” that the recent tax overhaul led to the increase of prepayments. “We’re not talking just a few hundred,” he said on Tuesday. “We’re talking thousands of people.” Marcoccia also believes the online system that allows people to pay online contributed to the increase.
Islip receiver of taxes Alexis Weik said her town’s administration saw the increase coming a few months ago. “It’s causing some mayhem, but the lines are moving,” she said last Thursday. “I know of some other towns who are really struggling to keep up.”
Weik said she wasn’t approved to extend office hours on Nassau Avenue (across from the roundabout, behind Islip Town Hall). She also didn’t feel it was necessary. The lines were moving rather quickly last Thursday, as there were more tellers on duty.
An East Islip resident named Al commented last week outside the municipal building: “You’d think they were giving something away in there.” While his wife, Rita, was paying inside, he admitted he didn’t know much about the new plan, but was advised by his accountant to pay early. “They told me I could save about $1,500,” he said.
A Sayville resident named Colette said something similar. “My accountant is telling me to pay up now,” she said.
The IRS has advised taxpayers, as well as tax professionals, that prepaying 2018 state and local property taxes in 2017 may be tax deductible, but only under certain circumstances.
“In general, whether a taxpayer is allowed a deduction for the prepayment of state and local property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018,” the agency wrote in a statement late last month. “A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.”
So, only those who already have their 2018 tax assessment can fully pay their taxes in order to get the deduction. At this point, people can only guess what their taxes will be. That doesn’t seem to be enough, according to the IRS.
Both Brookhaven and Islip Town residents, fortunately, had their property taxes assessed at the time of payment.
Many Islip residents who showed up to pay early last week heard the fact that the GOP bill drastically cuts tax deductions, but were skeptical, or perhaps hopeful that the tax breaks weren’t actually going away.
One of the major breaks going away under the Tax Cuts and Jobs Act is state and local taxes. The bill now caps deductions for state, local and property taxes at $10,000. This is obviously a major blow to people in high-tax states, particularly Long Islanders.
Many, like Barbara from Islip, expressed confusion about how the plan applies to them specifically. “I don’t know what it’s going to mean for me,” she said.
The new tax bill keeps the existing seven tax brackets, but changes the rates and income levels—the low end being 10 percent and the high end ranging from 39.6 to 37 percent.
“Is it good? Is it bad? We don’t know,” said a couple that didn’t want to be identified, in regards to the tax overhaul. “We just pay what we have to.”
Bill from Bay Shore was a little more pessimistic. “We’re going to get screwed next year,” he said. When asked whether he pays his taxes this early, he replied, “No, I never pay them this early,” as did many others who came out that cold afternoon.
A number of others, however, explained they have always done their best to square everything away early. Rev. Scott of Bay Shore was paying on Thursday for his father, who “has always done it this way.”
Another man, who didn’t want to be named, also said he often pays before the end of the year, and was quick to dismiss the Republican tax plan as a cause for the early payments that were pouring in.
A Brightwaters resident, who also didn’t wish to be named, said the tax plan was the “sole reason” for paying early. But he also expressed some doubt that this was a done deal. “I’m paid until [November of 2018], but we’ll see if the IRS allows it,” he said. “They’re going to get their money no matter what.”
When asked what tax bracket the majority of prepayers fell into, Brookhaven’s receiver of taxes said there was a mixture. “We’re still going over the numbers,” Marcoccia said, “but I was there, greeting people as they came in to pay. I was looking at their statements and could safely say it was very diverse.”
A Bay Shore resident named Jill said the loss of the deductions was a shame, “because you might lose a lot of the young people who want to buy a house here.”
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