Quote:
Originally Posted by texastek76
I know several people who pay their previous years taxes in January then pay the current year that same December. That way they get to deduct both years taxes on one return. It is cyclical and you get no benefit every other year so I don't get it but some think it is the way to go.
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It is because their deductions with only one years taxes is very close to the standard deduction. So, one year, they get the standard deduction, and the next year, because they paid two years of taxes in that year, they get a higher deduction.
For example, say the standard deduction is $5000 (it's not, but play along)and your property taxes for one year is $4000 and the rest of what you can deduct is $1000. One year, you use the $5000 standard deduction, and the next year you pay $4000 in January (for the previous year) and $4000 in December (for the current year), plus $1000 of other deductions (for the current year), so you can use $9000 instead of $5000.
So every other year, you have $9000 in deductions instead of $5000.