How does a person "double up" when it comes to taxes?

Question

I know some people double up or paid for two tax years in one year and none in the next; then repeat the cycle. So do you write one check on Dec. 30, 2006 for instance, and another for Dec 31, 2006 with a note saying for real estate taxes in 2007. I understand the principle, just a little confused on how this works.

Answer 1

What you are talking about refers to Real Estate Taxes. You can pay your 2007 Real Estate taxes in 2007 and also prepay or prepay a portion of your 2008 Real Estate taxes in 2007. You can also do this with mortgage interest by paying your January 2008 mortgage payment in December 2007. You can also do this with state income tax payments, by paying your January 15, 2008 payment by December 31, 2007. Now for all of this to actually mean anything your total itemized deductions would have to add up to more than your standard deduction for your filing status and age. Otherwise if you end up taking the standard deduction then "doubling up" does you no good.

Answer 2

You pay your 2006 taxes after January 1, 2007, and then pay the 2007 taxes before December 31, 2007.

Answer 3

You can deduct the taxes in the year when you actually pay them. So you might pay the current year's taxes early in the year, and the following year's taxes late in the year. When you actually make the payments will probably depend on the due dates.

This might save you taxes by making you eligible to itemize in the years when you're paying two year's taxes.

Answer 4

PepsiLime (second answer) gave a very good answer. Normally this method is used by people whose itemized deductions are very close to the standard deduction. They 'double up' in even numbered years and itemize deductions. They then claim the standard deduction in odd numbered years when they don't have the 'extra' itemized deductions.