Sweeping changes to the national tax code prompted many taxpayers around the country and in Vermont to act quickly in the final days of 2017 to take advantage of deductions that will disappear in the new year.
One key provision of the new tax law passed in December will limit to $10,000 the income tax deduction for state and local taxes starting in 2018.
The unlimited deduction still applies to taxes paid in 2017. The IRS last week clarified the change saying filers this year will be able to claim property taxes paid in 2017 as long as they were billed at the time they were paid.
This appeared to include property tax payments that are due in early 2018 for which municipalities had already sent out bills.
For Charlotte and Hinesburg, tax bills don’t come out until August with payments due in November. So tax bills for 2018 were a long way off when the federal legislation passed last month.
Still, that didn’t stop some from paying early anyway.
“We’ve always accepted pre-payments,” said Charlotte Town Clerk and Treasurer Mary Mead. However, Mead said, at this time of year she has usually collected less than $10,000. As of Tuesday, she said approximately $890,000 had been paid early.
Hinesburg has the same billing cycle as Charlotte, so it will be awhile there too before taxpayers see a bill for taxes due in 2018.
Just a few in Hinesburg stopped into the town offices to pay ahead before 2017 ended.
“I advised them that I would accept payments towards next year’s taxes, as I always do, for people who find themselves in a situation where they want to pay early,” explained Town Clerk and Treasurer Missy Ross.
Early payments remain in taxpayers’ accounts as a credit toward the next bill, Ross explained. As of Dec. 29, Ross said she had received early payments from just six taxpayers totaling $45,548.45.
In neighboring Shelburne, the town offices were much busier. Shelburne breaks tax payments into three bills paid in August, November and March, so property owners there already had a bill due in 2018 prior to the start of the new year.
Town Manager Joe Colangelo said approximately 425 Shelburne taxpayers made early property tax payments in the closing days of 2017. Their payments totaled more than $2 million, he said. That’s about three times the usual total for early tax payments made toward the third bill of the tax year, he noted.
Staff reporters Chea Waters Evans and Mark Kobzik contributed to this report.