The standard deduction is upped by $1000 for joint filers (500 for single) who paid up to $2500 in real estate or property taxes. If you paid over that amount, you can still claim it as a line item itemized deduction. Topic 503 – Deductible Taxes, IRS website and http://taxes.about.com/od/deductionscredits/qt/propertytax2008.htm
To answer your other question, many states collect property taxes based on the assessed value of real estate.
Real estate taxes can be included as a deduction. Permitted deductions in all categories must be greater than your permitted standard deduction before they reduce your tax liability. For example, a single person under age is allowed a standard deduction of $5450. If that person owns a home that is mortgaged and has medical expenses, interest, real estate taxes, state taxes etc, and his total deductions are $7500, that reduces his taxable income by $2050.
Exception for people over 65 – seniors paying real estate taxes get a $500 addition to their standard deduction if they are unable to itemize deductions.
The taxes you pay on real estate can benefit you on your income tax return if you itemize your deductions on Schedule A of Form 1040. You may claim the property taxes you pay and the mortgage interest.
3 Responses for "How can taxes you pay on real estate benefit your income tax return?"
The standard deduction is upped by $1000 for joint filers (500 for single) who paid up to $2500 in real estate or property taxes. If you paid over that amount, you can still claim it as a line item itemized deduction. Topic 503 – Deductible Taxes, IRS website and http://taxes.about.com/od/deductionscredits/qt/propertytax2008.htm
To answer your other question, many states collect property taxes based on the assessed value of real estate.
Real estate taxes can be included as a deduction. Permitted deductions in all categories must be greater than your permitted standard deduction before they reduce your tax liability. For example, a single person under age is allowed a standard deduction of $5450. If that person owns a home that is mortgaged and has medical expenses, interest, real estate taxes, state taxes etc, and his total deductions are $7500, that reduces his taxable income by $2050.
Exception for people over 65 – seniors paying real estate taxes get a $500 addition to their standard deduction if they are unable to itemize deductions.
The taxes you pay on real estate can benefit you on your income tax return if you itemize your deductions on Schedule A of Form 1040. You may claim the property taxes you pay and the mortgage interest.
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