Is there a reason to pay MFs early?

[CMF]

I'm thinking of waiting until the final due date to pay my MFs. I don't see any benefit from paying ahead of time.

Charles

 

[JMSH]

You do not have this problem but we are in Canada and hence are MF are in US dollars and we are paying in Cdn dollars which currently is only worth 82 cents to the US dollar. But since the Fed is flooding the economy with US dollars I am confident that by January 2009 the Cdn dollar will be more equal to the US dollar. Last year we paid our fees early because in December 2007 the Cdn dollar was equal to or even worth more than the US dollar.

 

[rsnash]

I don't see any reason to with Marriott. I've read elsewhere on TUG about people prepaying their MF even years in advance. I just don't get that!? Why would you pay out what could be sitting in a bank?

On the other hand, given the economy and likelihood of many people being late or even defaulting on their MF, it would behoove the TS companies to offer some sort of incentive to pay on time or early. I.e. Marriott Rewards points or 10% off.

 

[aka Julie]

We have 3 Marriotts. I split them up and pay 1 per month for 3 months (charge to my Marriott Visa, of course ). That way it doesn't hurt quite as much. Thus at least 1 is paid early.

 

[wuv pooh]

In RCI you cannot deposit your week until the maintenance fees are paid. II does not require that so there is no need to pay early for your Marriotts.

 

[rsackett]

Only reason I can tink of is to claim the taxes this year.

Ray

 

[MOXJO7282]

We have 3 Marriotts. I split them up and pay 1 per month for 3 months (charge to my Marriott Visa, of course ). That way it doesn't hurt quite as much. Thus at least 1 is paid early.

Same here. Spreads it out alittle bit.

 

[Dave M]

Only reason I can tink of is to claim the taxes this year.

Ray

That's the reason for paying early. Pay a few weeks early and accelerate the deduction for property taxes by a full year. Paying by credit card won't accelerate the deduction, unless you pay that amount to the credit card company by year-end.

 

[dioxide45]

That's the reason for paying early. Pay a few weeks early and accelerate the deduction for property taxes by a full year. Paying by credit card won't accelerate the deduction, unless you pay that amount to the credit card company by year-end.

Is this different from charitable contributions? Charitable contributions are deductable in the year they were made, even if you paid them by credit card and that balance is not made until the next year.
This sounds like an accounting nightmare to try and figure out what was paid first/interest amount/etc.
If a mortgage lender pays your property taxes for you, they report to you what you paid in that year, not based on what they collected from you. Many lenders will try to pay taxes due in January and February by the end of December so the customer can get the write off early.

 

[Dave M]

Yes, it's different from charitable contributions. The deduction for a charge to a credit card is a special rule that applies to contributions and medical expenses, but not to property taxes. For taxes, pay it this year or wait for 2009 for the deduction.

See the last two full paragraphs in the lower left corner of page 147 in this IRS publication for the cash payment requirement for property taxes.

 

[dioxide45]

See the last two full paragraphs in the lower left corner of page 147 in this IRS publication for the cash payment requirement for property taxes.

Dave, I know your a tax pro, so I don't by any means claim to know more about this. I also don't intend to get the thread off the original topic. However, my interpretation of the following quote from the publication is that the term "payment" refers to your tax payment, not your payment to the credit card company. So if you call and pay by phone with a credit card on December 30th 2008, but it doesn't post to your account until January 3rd 2009, then it wouldn't be deductible in 2008. If you pay it on December 24th and it posts on the 28th, then it is deductible in 2008, regardless of when you pay your credit card bill.

If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of payment.

 

[nycjimster]

Okay...I have a hefty maintenance bill from the 4 units. Can someone advise the latest time to pay the bill without accruing a late fee? Thanks.

 

[Dave M]

The paper billing and your online account both show the due dates. It's different for each resort. One of my Marriotts has a January 12 due date and another has a January 19 due date. Those paper bills typically state "...interest at 18% and/or a late charge of $25 per unit week [if paid] after the date shown [on the bill]."

 

[ml855]

In RCI you cannot deposit your week until the maintenance fees are paid. II does not require that so there is no need to pay early for your Marriotts.

I own a couple of TSs that I can deposit into II and one of them needs to have it's MFs paid before I can deposit it. My Marriott I can deposit before the MFs are paid, so I think it depends on the TS itself.

I pay my MFs over several months so I'm not hit all at once with a large bill at the beginning of the new year.

 

[abdibile]

With RCI there are also some timeshares where fees have to be paid before depositing and some resorts that do not require fees to be paid.

This depends on the resort, not the exchange company.

RCI or II ask the resort if you really own the week and some resorts only confirm if fees are paid.