View all tips Next Tip
Real Estate Taxes
Property owners are charged real estate taxes to cover government services related to the property. Local property taxes may include city, town, and/or county taxes; school taxes; and even other charges (such as fire or sewer district taxes). Fortunately, the tax law allows property owners to deduct these taxes.
Your burden of paying local property taxes, including city, town, and/or county taxes and school taxes, can be eased somewhat by deducting your payments.
If you itemize deductions, you can deduct real estate taxes you pay on your main home and any other home you own. There are no limits on the dollar amount of real estate taxes you can deduct. There are no limits on the number of homes for which you can claim the deduction. The deduction for real estate taxes on your residence and vacation homes is claimed as an itemized deduction (you cannot use this benefit if you claim the standard deduction). If you claim the standard deduction, you can deduct $500 ($1,000 on a joint return) for property taxes on your principal residence in 2009.
If you pay real estate taxes on a rental property, it is deductible against your rental income, regardless of whether you itemize your personal deductions.