Some residents race to prepay property taxes

Dec. 28--NEWBURYPORT -- With just days left in 2017, local officials are overwhelmed with calls and visits from homeowners who want to pay next year's property taxes before new rules limiting state and local tax deductions take effect Monday.

Newburyport is one of many communities across Massachusetts where residents are scrambling to make large payments in advance to get ahead of changes as part of the new federal tax bill passed by Congress last week.

For many wealthy taxpayers, paying early could help them claim larger deductions next year. The rule change will limit state and local tax deductions to $10,000 next year.

"Things have been crazy, and this is usually a quiet time of year but we have been inundated with calls and people coming in," said Newburyport Treasurer Julie Languirand. She estimated that her office has received an average of 50 to 60 calls per day since late last week from residents hoping to prepay their property taxes.

Amesbury Tax Collector Donna Cornoni said residents in her community have also been reaching out in recent days, although in smaller numbers, hoping to pay their taxes early. On average, she said the office has received up to 10 additional calls or visits per day.

Newburyport is allowing residents to pay the remaining third and fourth quarters of their tax bills for the 2018 fiscal year, which are due in February and May, respectively, by the end of calendar year 2017. But according to Languirand, many people are trying to overpay to get even further ahead.

"They want to pay a full year in advance and that's not something we can allow because we don't have a commitment for (the 2019 fiscal year)," Languirand said. "So they're able to pay their February and May taxes, and we're giving them that option."

The new tax bill also decreases the corporate tax rate from 35 to 21 percent, doubles the standard deduction to $24,000 and gives individual taxpayers temporary cuts, most of which will expire by 2025.

"On paper, it makes sense for everyone, but if you're subject to the alternative minimum tax, then it doesn't because it's going to come right back ... . You wouldn't be able to use it," said Brad Wright, a financial planner for New England Financial Planning Group in Burlington.

Languirand said the average property tax bill for a single-family home in Newburyport is about $7,500 and that she expects many more inquiries leading up to the new year. And while some residents have come asking for advice on whether to pay their property taxes early, she warned that no one in her office is willing to weigh in on the matter.

"We certainly don't want anybody to be using us as a tax shelter because it's really insignificant overall in their financial picture, so they really have to do what's in their own best interest and be their own advocate for it," Languirand said. "There are people who are still struggling to pay their taxes. There are both sides of the coin here. There are people who pay in advance every year, and then we have people who are still struggling to make their quarterly due payments."

Languirand said that while the Newburyport treasurer's office is low on help because of the holiday season, she hopes to be thorough in helping residents through the end of the year.

"The city is usually short-staffed. It's usually a quiet week here but we're doing our best to deal with the influx and not turn anybody away," she said.

Residents may make payments at the treasurer's office by noon on Friday.

Jack Shea can be reached via email at [email protected] or by phone at 978-961-3154. Follow him on Twitter @iamjackshea.

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