Property Tax Deduction Irs
December 28th, 2010
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Question: I have a simple question about deducting property taxes on form 1040.?
Greetings,
I’ve always been able to figure out my own taxes with no problems or questions, but last summer I bought my very first home. As I puzzle over the tax forms this year, and what I can deduct, I have some questions:
#1: Can I deduct on my 1040 A Form (Itemized Deductions) the property taxes I paid in November of 2007? The entire amount I paid? Really?
For example, back in November I paid a total of $1,898.64 ($711.01 and then an additional $1,187.63 for the supplemental assessed values.) Is this all deductable on this form?
If so, what I don’t understand is when IRS eventually sends this same amount back to me, then it’s like I’m not really paying these property taxes at all. (Not if I get the money back from the IRS.)
That can’t be right. I can’t believe that my property taxes are all deductable.
#2… Is any amount of the $270.00 each month I pay for my Association Dues deductable?
Thanks in advance for any help.
Answer: You can deduct your property taxes. All of it. But you don’t get it back! It just comes off your taxable income. Example:
$25,000.00 income less $1898.64 = $23,101.36 taxable income. So you just pay taxes on a lower amount than you would have.
HOA dues are not deductible. If you had mortgage insurance charged it is deductible for 2007 – this is a new deduction- only for 07. I am not talking about your homeowners insurance for fire- but for PMI.
Good luck!
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Tags: credit, deduction, irs, property tax deduction, property tax deduction irs, tax, taxes