Long Island property owners are inundating town tax receivers’ offices with questions about paying their 2018 taxes early to get ahead of the new federal tax code’s limits on state and local deductions, officials said.
Tax receivers said they have fielded hundreds of calls from residents who want to pay their 2018 property and school taxes this month to deduct them from their 2017 federal taxes.
Under the $1.5 trillion federal tax bill signed into law Friday by President Donald Trump, property owners will only be able to deduct up to $10,000 in state and local income, sales and property taxes starting next year. The law also temporarily lowers individual taxes, cuts corporate taxes to 21 percent from 35 percent and increases standard deductions.
For many Long Islanders, that $10,000 will not be enough to cover their property taxes. Last year, average property tax bills were $11,232 in Nassau and $9,333 in Suffolk, according to an analysis by Attom Data Solutions, a California company that tracks real estate data.
Even if people pay early, it is not clear whether the new law will allow them to deduct 2018 payments from their 2017 federal taxes, said Stephen J. Acquario, executive director of the New York State Association of Counties.
“Ultimately, it will be up to the IRS to determine if the prepayment of 2018 property taxes [is] deductible for the 2017 tax year,” Acquario said in a statement.
IRS representatives said in a statement the agency is “working to provide more specific information and guidance to taxpayers, businesses and the tax community as quickly as possible in the weeks and months ahead.”
Suffolk County property owners could pay next year’s taxes as early as Dec. 1 this year, according to the Suffolk County Tax Act and town tax receivers.
Gov. Andrew M. Cuomo on Friday signed an executive order allowing payment this month of all or partial 2018 taxes in towns and counties, such as Nassau, that typically do not allow it.
Officials in Nassau are trying to take advantage of that. Nassau County Executive Edward Mangano will sign warrants to issue to the towns on Tuesday so they can finalize the tax bills, said Rob Walker, chief deputy county executive.
Homeowners pay taxes to the county, town and different special taxing districts, so crunching the data from the files to determine tax amounts for individual properties is time-consuming, said North Hempstead Receiver of Taxes Charles Berman.
Town and county officials said they will work to compute those numbers as quickly as possible, and Walker said the county will try to post them all online, so residents know how much they owe.
Berman, along with the tax receivers from the towns of Hempstead and Oyster Bay, said they are either calling in employees from vacation to work in the coming days or asking them to work overtime — or both — to handle the expected influx of early payments. All three towns will accept 2018 taxes paid with a check dated in 2017 and with a 2017 postmark.
Oyster Bay Receiver of Taxes James J. Stefanich said that if an amount can’t be computed by the end of the week, the town will allow residents to pay the 2017 tax amount, plus 10 percent, and the town will refund any amount that is overpaid. His office will offer extended hours Wednesday through Saturday.
Vicki Goldman, 61, of Merrick said she’ll be pleased if she and her husband can pay their full tax bill of about $13,000 early, especially because “Nassau County seems to be singled out” by the tax code revision.
“It’s not my fault Long Island is an expensive place to live,” said Goldman, who works in bookkeeping and accounting.
John Beck, 41, a retired court officer from North Babylon, was one of around 50 people who tried to pay their 2018 property taxes at Babylon Town Hall in Lindenhurst Friday afternoon, only to discover it was closed for the Christmas Eve holiday.
“Everyone was very upset,” Beck said.
Most of the would-be taxpayers were seniors and one woman was “shaking her fist at the building,” he said.
“A couple people said: ‘Oh, we got to pay it before the Trump bill!’ ” Beck said.
Tax receivers in the three Nassau towns sent out automated phone messages or news releases encouraging property owners to pay school taxes early.
Hempstead Town Receiver of Taxes Donald X. Clavin Jr. said his office has received 100 emails a day from residents asking about paying school taxes early to take “advantage of that tax deduction before it’s gone.”
“We’ve seen more foot traffic in the last week than we’ve seen in 20 years in the tax office,” Clavin said.
Stefanich said he has been “swamped” with calls and emails for the past two weeks. He said in a statement he encouraged residents to talk with their tax professionals to determine what approach is best for them.
Residents of Southampton, Brookhaven and East Hampton towns have already made combined tax payments of nearly $75 million, an increase of about $21 million from the same tax period last year, a Newsday analysis of data from tax receivers shows. Figures from other towns were not available.
“What we’re finding is people never understood they could pay it in full,” Southampton Town Receiver of Taxes Theresa A. Kiernan said. “They’re thankful they can pay it all now.”
In Brookhaven Town, almost 8,000 residents made tax payments as of Wednesday, with nearly 3,000 of those full payments, according to data provided by town officials. Tax receiver cashiers estimated up to 85 percent of calls were from people inquiring about paying in full.
“In fact, some people are asking about paying 2018-2019 (taxes) now as well,” town communications director Jack Krieger said.
Shelter Island Receiver of Taxes Annmarie Seddio said she has had “an overflowing amount of people” asking to pay their taxes in full.
“I’m seeing a huge amount of people, and not just the top taxpayers, pay in full,” Seddio said.
For people who pay their tax bills through their mortgage payments, the ability to pay early depends on how much is left in escrow, Garden City CPA Joseph Parenti said. He advised property owners to check with their mortgage holders.
Nancy Fitzsimmons, 50, of Malverne, who works for a financial institution, said she used money from her savings to pay her $5,900 school taxes on Saturday — even though her mortgage holder, Island Federal Credit, told her it could not guarantee that if she paid now, the company wouldn’t pay the same bill in 2018.
The company told her she could apply for a refund if that happens, she said. “They tried to be as accommodating as they could,” she said.
Michael Bryan, 57, a retired NYPD officer from Massapequa, said he supports the tax reform bill except for the state and local deduction cap. His 2017 property taxes totaled $9,100.
Bryan said he would be in favor of Nassau officials finding a way to allow people to pay early this year to retain their full deduction.
“If there’s anything they can do on a one-time basis, that would go a long way with everybody, no matter your political affiliation,” Bryan said.
Tom and Lucy Regan of Amagansett said they typically wait until the “last minute” to pay their tax bills, but paid early at the East Hampton Town tax receiver’s office on Thursday after receiving advice from their accountant. Tom Regan, 58, a Capitol One banker retiring at the end of the month, and Lucy Regan, a 45-year-old freelance writer, said they “find it strange” that Nassau and Suffolk have different policies on paying early.
William Taylor, 72, the East Hampton Town waterways manager who lives in Springs, said he did not mind “putting up the cash months early” to pay his $6,598 tax bill Thursday because interest rates are so low, “you might as well get a deduction.”
“Everyone should pay early,” said Taylor, who is also an elected member of the town trustee board, which oversees town bodies of water. “It’s a no-brainer, unless you don’t have the money.”
Long Island property owners said they still have to digest the tax bill’s impact.
Brenda Simmons, 62, the executive director of the Southampton African American Museum, said Thursday she had not had time to dig into the new code because it was passed so quickly.
“I really need to buckle down to see overall how this is going to affect me,” said Simmons, of Southampton Village.
With David Olson, Ted Phillips, Carl MacGowan, Vera Chinese, Jesse Coburn and John Asbury.
Property tax payments on Long Island
In Suffolk County, the first property tax payment covering the period between Dec. 1, 2017, and Nov. 30, 2018, is not due until Jan. 10.
In Nassau County, the first property tax payment for 2018 is due between Feb. 10 and 13.