City of Alexandria to Accept 2018 Property Tax Advance Payment and Encourages Taxpayers to Seek Advice from Qualified Tax Professionals

There could be benefits

Changes to federal tax law expected to take effect for the 2018 tax year have raised questions about the potential benefits of prepaying state and local taxes. Under current law, state and local tax payments may be fully exempt from federal and state income tax. Under the new legislation, which has been passed by Congress and is awaiting presidential approval, the exemption would only apply to the first $10,000 in payments each year. The new law does not change tax policies related to filings for the 2017 tax year.

The City of Alexandria accepts prepayment of property taxes. A payment made up to December 31, 2017 will be applied to the 2018 property tax balance if the ratepayer has no other outstanding balance with the City. However, the City does not provide individual advice on the federal tax impact of prepaying local taxes. There may be no prepayment benefit depending on the final interpretation of the new law; how much the taxpayer is likely to owe in 2018; whether the taxpayer takes advantage of the new higher standard federal income tax deduction in 2018; and other factors. The City encourages ratepayers who are considering prepaying to consult with qualified tax professionals before deciding whether to prepay and determining when payment must be sent or received.

Ratepayers who wish to prepay city property taxes can estimate their payments based on 2017 tax amounts, but will still be responsible for ensuring payment of actual balances due once invoices are prepared in May based on the 2018 property assessments and the annual tax rate adopted by City Council. Full payment of the first half of the 2018 property taxes will be due by June 15, 2018. Taxpayers who prepay in 2017 and whose regular property tax payments are made by third parties, such as mortgage escrow, should notify their normal payment providers to avoid duplicate payments in 2018.

The preferred method of prepayment is by cheque, with “Prepayment” noted in the memo field. For the mailing address and other ways to pay in person or online, see Note that all payments will be deposited upon receipt even if applied to future balances; the City does not accept payments with future deposit instructions.

For more information on property tax and prepayment, please see or contact the city’s treasury division at [email protected] or 703.746.3902, option 8.

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