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Taxes

IRS: Homeowners can deduct pre-paid 2018 property taxes, but under limited circumstances

The Internal Revenue Service announced Wednesday that under "certain circumstances," homeowners will be able to pre-pay their 2018 state and local property taxes and deduct them on their 2017 returns.

The new tax reform bill signed into law last week caps the amount of state and local taxes that can be deducted from income at $10,000, and while the bill is clear that income taxes can't be paid early, it's vague when it comes to property taxes, The Hill reports. The IRS announcement said that homeowners can prepay their 2018 property taxes if state laws allow them to be assessed before Dec. 31, 2017. The $10,000 cap goes into effect in 2018.