Michelle French, Denton County's tax assessor and collector, addressed questions about 2018 tax prepayments in a news release Friday. French advised that the only option taxpayers have to prepay on 2018 taxes, before the Republican tax overhaul goes into effect, is to enter into an escrow payment agreement with the county — which French says does not guarantee whether taxpayers will save money in the long run.
An escrow agreement is a payment plan in which taxpayers can front-load a deposit and begin monthly payments on taxes that will be levied in October. However, the agreement would be based on an estimate of what the individual taxpayer would owe, which means taxpayers could possibly overpay or underpay on their future taxes.
Also, taxpayers must enter into the agreement before the end of the year, which means they must sign the appropriate documents in person at the county tax office before closing time Friday.
In cases where homeowners overpaid or underpaid on their taxes, French said in an email that a refund, or a bill, would then be issued to the taxpayer to adjust for inaccuracies.
"We make no claim whatsoever that this will be a tax deduction," French said in an interview Wednesday.
She said because of how recently the new tax legislation made it into law, her office hadn't needed to address concerns such as prepayments in such a way before. Because President Donald Trump signed the tax bill into law last Friday, it wasn't until Wednesday that French was able to address the escrow agreement plan.
Tax offices across the country have been asked about prepayments, and not all offices were accepting them. The Associated Press reported Wednesday that people across New York were lining up at their local tax offices to file prepayments.
The Washington Post reported Wednesday that the Internal Revenue Service has specified that local tax authorities have the power to decide on whether to accept the prepayments. Denton County's plan to specifically accept only escrow agreements was implemented after French consulted with other area counties and attorneys, she said.
"There is no other way," French said, again stressing that neither she nor her office can make any assertion as to whether taxpayers will save money by entering into the escrow agreement.
French said last year, her office processed roughly 200 escrow agreements after sending out about 500,000 tax bills.
It's important to note the distinction between making a payment to one's levied taxes and entering into an escrow payment agreement, which acts as deposits that will eventually be applied to owed monies after taxes are levied next October.
"It's not a tax payment. It's an escrow payment," French said. "There still has to be monthly payments."
FEATURED PHOTO: Denton County residents sit and wait to be served Wednesday at the Horn Government Center, which houses the tax assessor-collector's office.