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I live in New Jersey and my accountant advised me to prepay…

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Second opinion] Hi, I...

Second opinion] Hi, I live in New Jersey and my accountant advised me to prepay half of my annual property taxes. Does it make sense to use my HELOC which has a variable interest rate to prepay my property taxes?

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Submitted: 7 months ago.Category: Tax
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Answered in 1 hour by:
12/20/2017
Tax Professional: Lev, Tax Advisor replied 7 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,140
Experience: Taxes, Immigration, Labor Relations
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If you itemize - that will make difference to prepay some of your real estate and personal property taxes and deduct that amount on your 2017 tax return.

If however - you are using standard deduction - the prepayment will not make any difference as you will deduct the standard amount anyway.

If you have the money just sitting in your bank account - you may use these funds to prepay your property taxes - and will reduce your tax pressure later.

But if you have to borrow teh money from HELOC and will pay additional interest on that amount - I do not see any reason to prepay.

In NJ - Property tax payments are due annually in four installments, February 1, May 1, August 1 and November 1.

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