Claiming Property Taxes on Your Tax Return

If you’re a homeowner, you can claim a deduction for your property taxes on your federal income tax return. However, the rules for claiming this deduction can be complex. Here’s what you need to know.

Itemizing Deductions

To claim a deduction for your property taxes, you must itemize your deductions on Schedule A of your federal income tax return. This means that you must forego the standard deduction and instead report the total amount of your deductible expenses.

Limitations on Deductions

The amount of your property tax deduction may be limited depending on your income level. In addition, there is a cap on the total amount of state and local taxes that you can deduct on your federal income tax return. For tax year 2021, the cap is $10,000 ($5,000 if you’re married filing separately).

How to Claim the Deduction

To claim a deduction for your property taxes, you must report the total amount of your property tax payments on Schedule A of your federal income tax return. You should receive a Form 1098 from your mortgage lender or local government agency that shows the total amount of property taxes that you paid during the year.

Conclusion

Claiming a deduction for your property taxes can help reduce your federal income tax liability. However, it’s important to understand the rules for claiming this deduction and to make sure that you’re reporting the correct amount on your tax return.