How NJ Could Let You Get a Bigger Deduction On Your Income Tax
Thousands and thousands of New Jersey homeowners pre-paid their 2018 property taxes last month so they could deduct them on their 2017 tax returns.
Only problem was many folks didn’t realize they could only do that on their federal tax returns and not on their state returns. New Jersey law specifies you cannot deduct property taxes that are paid in one year if they’re not due until the following year.
Assemblyman Roy Freiman, D-Somerset, is about to introduce a measure to change that law.
His legislation would require the state to allow property taxes prepaid in 2017 for the 2018 calendar year to be claimed as a deduction for the 2017 taxable year.
He said changing the law is important because “the federal tax law that got passed had a dramatic negative impact on New Jersey homeowners.”
“This is a bipartisan issue. You have people on both sides of the aisle that are upset about this change that’s impacting New Jersey.”
His legislation would also double the maximum property tax deduction, from $10,000 to $20,000, for the 2017 taxable year, so many of the 2018 pre-payments can be covered.
Freiman noted while this will help provide a certain amount of tax relief in the short term, “this does nothing to address a broader issue that we have to do, which is how do we do longer term fixes on New Jersey taxes in total.”
He said the No. 1 issue in the Garden State is still property taxes, and we’ve been talking about it for so long that “people are, for the most part, surrendering on this issue. But there’s still hope.”
Freiman said lawmakers have to take a realistic look at spending and revenue.
“There’s not going to be one magic epiphany that is going to overnight change the mess we’re into. What’s important is to get on the right path. Let’s start this path going forward right now.”