Why taxpayers flooded Butler County offices to end 2017, and what it means for 2018

Because the Butler County auditor’s office hustled at the end of last year to finalize 2017 property taxes, residents were able to prepay 2017 taxes — a tax advantage for this year — in advance of sweeping tax changes on the horizon in 2018.

There is a change coming with new new tax laws that include doubled standard deductions, nearly eliminating the need to itemize. A lot of people, however, wanted to get credit for their itemized tax deductions, so they flooded the auditor’s and treasurer’s offices with phone calls and visits in the final week of 2017.

Butler County Treasurer Nancy Nix said the office received 60 percent more prepaid tax bills, for a total amount of $12 million — prepaid taxes totalled $3 million in 2016 — in 2017, but the figures are a bit deceiving.

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“Our intake was four times the prior year amount, however, the number of payments made was only 60 percent higher — 3,000 vs. 4,900 — than the previous year,” Nix told the Journal-News. “The disparity between the two calculations makes more sense when you consider that those who would decide to prepay would be those with higher incomes and higher property values relative to average income and average property values.”

Property tax prepayment is nothing new, but this year taxpayers were able to cash in on the sweeping new tax laws that next year could make itemized deductions all but obsolete. County Auditor Roger Reynolds, who is also a certified public accountant, said this year the standard deduction for married couples doubles from roughly $12,000 to $24,000. About 80 percent of taxpayers are expected to eschew itemization going forward, but this was an opportunity for a last boost for the 2017 tax year when they are still itemizing.

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“There were people who could take advantage of paying early knowing that in 2018 they are going to take the standard deduction,” Reynolds said. “Where in previous years they were itemizing, so it was advantageous to take as many deductions as you could for 2017 on your itemized form.”

The Internal Revenue Service threw a curve ball on Dec. 28 however, when it issued an edict saying people had to have their exact tax amounts to prepay, where estimating used to be allowed, according to Reynolds.

“It’s not normal for us to have those calculations completed by the end of the year,” Reynolds said. “This was unusual for us, and we spent the extra hours to make sure that we got them calculated.”

Chuck Weber, a West Chester Twp. resident and president of the county vet board, said when he called Reynolds’ office after hearing about the IRS rules he was told the office “was giving it their best shot” to get the tax bills calculated. After he learned they accomplished the task, he called it a “minor miracle.”

“I was totally impressed that the auditor recognized the need and took on the challenge to generate the 2017 taxes due in 2018 calculated, so that Butler County residents could prepay and deduct this property tax payment on their 2017 income taxes,” Weber said. “It’s nice to see a local county agency take the initiative and go the extra mile for the resident taxpayers.”

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