Property tax deduction are generally those property taxes that someone can deduct from their federal states.
But the question is: When can we ask for a deduction from our property taxes?
We’ll be able to ask for it when we are using our home for personal uses or itemize deductions on our federal tax return. When we say personal property, that includes a taxpayer’s main home, vacation home or a property in a foreign country.
Also, keep in mind, that the real state taxes that we can deduct include the closing costs when buying or selling a property and taxes paid to a county or town’s tax assessor on the assessed value of the personal property.
Now, let’s go over those taxes that we won’t be able to deduct.
Taxes paid on rental or commercial property and property not owned by the taxpayer cannot be deducted. Also, if you are a seller who has paid the seller’s delinquent taxes from a previous year, you won’t be able to apply any deduction for those taxes, as this is a kind of tax that is considered as part of the cost of buying a new place and not deductible.
Another key thing to keep in mind: In order to claim a property tax deduction, the tax must only apply to the value of the personal property owned and be charged on an annual basis. Therefore, if the state tax was only charged at the time the property was purchased then it does not meet the IRS definition of a deductible personal property tax.
A taxpayer can itemize deductions if the sum of all his eligible itemized expenses is greater than the standard deduction allowed in a given tax year.
So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.
Stay positive and stay hungry!
Make it a great day,
Sean La Rue