Property Tax Deduction
Candlefocus EditorUnfortunately this benefit can be quite limited starting in 2018 due to changes in the tax law. Under the new law, the deduction for state and local taxes, including property taxes, is capped at a total of $10,000 ($5,000 if married filing separately). However, the deduction may still be beneficial in reducing the amount of income tax you owe.
Unfortuantely, taxes paid on rental or commercial property, or on property not owned by the taxpayer, cannot be deducted as a property tax deduction. If a homeowner owns rental property, they will want to consult with a tax professional regarding what type of deductions are available for this type of real estate.
For homeowners who itemize deductions, a property tax deduction can be a lucrative way to reduce federal income taxes. Homeowners should check with their local and state tax authorities to determine how much they will owe in property taxes and should consult a tax professional regarding the deductions that are available for this type of tax payment. Taking advantage of deductions can provide homeowners with significant tax savings and reduce their overall tax liability.