CLEVELAND ,, Ohio – Due to the changes to federal tax law that went into effect in 2017, far fewer people than before will be able to list deductions for additional tax savings.
This is because the standard deduction has been greatly increased, now reaching $ 12,400 for singles and $ 24,800 for couples. It takes a ton of deductions to top that. According to an analysis by the tax foundation, this was only around 14% last year, compared with around 31% without any change in the law.
But for people who are just below the limit, there is a trick that can be used to cross the threshold and still take advantage of listing on their next return. Pay your entire property tax bill in 2021 by the end of this year.
Counties have different schedules for sending invoices. If you haven’t received your bill yet, check to see if it is available online from your county treasury.
In Cuyahoga County, you can find tax bills online at this link. The due dates for Cuyahoga County are January 21 and optionally for the second half of July. If you want, you can pay your entire 2021 tax bill by the end of this year, so the payment is a potential deduction on your next IRS return.
The key for federal tax purposes is when you pay.
One caveat, according to the IRS: “Your deduction of state and local income, sales, and property taxes is limited to a combined total of $ 10,000 ($ 5,000 if the marriage is filed separately).” This is unlike prior to the tax changes of 2017.
This is one of a series of stories that were republished over the holidays. For the latest advice and tips, visit our Personal Finance column at cleveland.com/Plain Dealer on cleveland.com. See previous columns at this link – This is rich!
Email questions and suggestions to [email protected]. Include your hometown and first name for publication. And to help sort out the clutter in my email box, remember to say “That’s Rich!” in the subject of the email.