Reference: HR 1, “Tax Cuts and Jobs Act.”

There’s a LOT of contradictory media articles on the subject of prepayment of California property taxes due April 2018.  Here’s an excerpt from Parkers Tax Bulletin:

Caution: The Conference Bill includes a provision blocking taxpayers from prepaying state and local income tax relating to the 2018 tax year in 2017 in order to circumvent the new limitation on the deduction. Specifically, the bill provides that, in the case of an amount paid in a tax year beginning before January 1, 2018, with respect to a state or local income tax imposed for a tax year beginning after December 31, 2017, the payment will be treated as paid on the last day of the tax year for which such tax is imposed for purposes of applying the provision limiting the dollar amount of the deduction.

Our analysis: As CA starts its fiscal year 7/1/17, the taxes payable in April are for a tax year beginning before 12/31/17 and should be ok.

So… in PLAIN LANGUAGE:  You CAN pay your 2nd installment of your 2017 property taxes (due by April 2018) before 12/31/2017 (postmark) and deduct in 2017 UNLESS you are subject to Alternative Minimum Tax in 2017.  You CANNOT pay your December 2018 (first) installment of your 2018 property taxes early.  The CA counties won’t take the payment and the IRS won’t let you deduct it.

Problem solved!