Update: Since our last article was posted, the IRS has issued an advisory on prepaying real estate taxes for 2018. The Service has taken the position that only real estate taxes paid and assessed in 2017 will be deductible on taxpayers’ 2017 income tax returns.
Unfortunately for the Greater RVA Area, this means many of us are out of luck on taking this deduction. Chesterfield County, Hanover County, and Henrico County will issue their 2018 assessments in January 2018, meaning that prepaying real estate taxes in those counties will not qualify for deduction on 2017 income tax returns. According to the City Assessor’s office, the City of Richmond DOES issue its assessment for 2018 in 2017. Therefore, prepaid property taxes in the City of Richmond should be deductible in 2017.
Click here for the full text of the IRS notice: https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-assessed-and-paid-in-2017