Deducting Property Taxes: What You Need to Know

As a homeowner, you may be eligible to deduct your property taxes from your federal income tax return. Here’s what you need to know to take advantage of this deduction.

Eligibility

To be eligible to deduct property taxes, you must own the property and be responsible for paying the property taxes. You can only deduct property taxes that you paid during the tax year, regardless of when they were due.

Deduction Limits

There is a limit to the amount of property taxes you can deduct on your federal income tax return. The limit is $10,000 for tax years 2018 through 2025. If you are married filing separately, the limit is $5,000.

Claiming the Deduction

To claim the deduction for property taxes, you must itemize your deductions on Schedule A of your federal income tax return. You cannot claim the standard deduction and the property tax deduction in the same year.

Exceptions

There are some exceptions to the $10,000 limit on property tax deductions. For example, if you use your property for business or rental purposes, you may be able to deduct all of your property taxes. Consult a tax professional for more information.

Conclusion

Deducting property taxes from your federal income tax return can result in significant tax savings. Make sure you are eligible and claim the deduction on your Schedule A if you qualify.