TEMPLE, Texas — It's now September, property taxes are due in December and are late if not paid by January 31 of 2025. So, as much as we hate to think about it, it's time to consider property and income taxes once again. That's our topic for this all-new Money Talks.
Did you know that only 10% of taxpayers actually itemize their tax returns?
"The 2017 Tax Cuts and Jobs Act eliminated the personal exemption, but increased the standard deduction by such a large amount that most taxpayers don't itemize their deductions," Certified Financial Planner Neil Vannoy explained to 6 News. "For example, in the 2020 tax year, 90% of taxpayers took the standard deduction."
A reminder, when it comes to your property taxes, the year in which you pay them is the year in which you are credited on your taxes. Again, if you are itemizing.
"For some taxpayers, it makes sense to 'double up' on two years' worth of property taxes in a single tax year," Vannoy said. "This will increase their itemized deductions, possibly getting them over the standard deduction amount so they can itemize and save more money. But keep in mind there's a $10,000 cap on the amount of state and local taxes that can be deducted on your federal tax return."
The 2017 Tax Cuts and Jobs Act made the corporate tax cuts permanent, but for the individual filers, that huge deduction and lower tax brackets could be going away in 2025.
"The standard deduction for 2024 is $14,600 for a single filer, double this for married filing jointly and even higher for taxpayers over 65," Vannoy said. "That's a huge hurdle to get over, even if you reach the full $10,000 cap on property taxes that you can deduct."
When it comes to your mortgage payment, you could get 13 payments in for 2024 on the calendar year which could also help at tax time.
"Since we're talking about property taxes, it makes sense to mention mortgage interest as well," Vannoy told 6 News. "Pre-paying your January mortgage payment before the end of the year will increase your 2024 mortgage interest deduction by the extra amount of interest you pay in the January payment. This can be beneficial for taxpayers that itemize."
There is now talk out of Austin that next year’s Texas Legislature will try and lower property taxes again, there's even talk of elimination. For more information, visit this link.
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