Property Tax Changes

You probably know about taking deductions to reduce your tax liability. To be clear, deductions are not the same as tax credits – deductions are applied to your earned income before calculating taxes, and thus reduce the amount on which you are taxed. Tax credits are more valuable, and are a direct credit towards the tax that is due.

You probably know about taking deductions to reduce your tax liability. To be clear, deductions are not the same as tax credits – deductions are applied to your earned income before calculating taxes, and thus reduce the amount on which you are taxed. Tax credits are more valuable, and are a direct credit towards the tax that is due.

When you do your taxes each year, you can either take a standard deduction, or you can keep a record of tax deductible expenses and choose to use that if it is greater. For 2008 the standard deduction is $5450, or $10,900 if married filing jointly.

It seems that many people I speak to have not heard that this year you can claim at least some of your property taxes as a deduction, even if you do not itemize your expenses. The law allows you to add your real estate taxes to the standard deduction.

There is a limit of $500, or $1000 for joint filers, so it can save you paying taxes on $1000 of your income. This is all part of the plan to stimulate the housing market.

Property Tax Changes by
No votes yet.
Please wait...

2 thoughts on “Property Tax Changes”

  1. i don’t know so much about taking deductions to reduce your tax liability,thanks

    No votes yet.
    Please wait...
  2. Seems like you would itemize if you have property taxes and interest deductions from mortgages. Putting everything on the 1040 only makes the 1040 longer.

    Free Tax Preparation’s last blog post..Don’t Take Your Losses!

    No votes yet.
    Please wait...

Comments are closed.