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The art of deduction is real
The art of deduction is real









the art of deduction is real

  • State and local income taxes or state and local sales taxes.
  • State and local property taxes, including real estate taxes and taxes assessed on other personal property, such as automobiles.
  • In a nutshell, the SALT deduction includes the following: In fact, before the passage of the Tax Cuts and Jobs Act, it was the most widely-used deduction by Americans in terms of dollar value. The deduction for state and local taxes, also known as the SALT deduction, is one of the most popular itemizable deductions on U.S. I mentioned in the previous section that state and local property taxes are deductible, but only to a maximum of $10,000. Here are the standard deductions for the various tax filing statuses in 2019 (that's the federal income tax return you'll file in 2020):

    the art of deduction is real the art of deduction is real

    Then, compare the total to your applicable standard deduction. State and local income and property taxes up to$10,000 (this includes your real estate taxes - more on this in the next section).Medical expenses that exceed 10% of your adjusted gross income (AGI).Mortgage interest on as much as $750,000 in principal.First, add up any of these itemized deductions you're entitled to: Here’s a quick way to estimate if you’ll be able to itemize. The Tax Cuts and Jobs Act dramatically increased the standard deduction, so itemizing isn’t worthwhile for most Americans. If not, you’re better off with the standard deduction. What this means is that if your itemizable deductions are more than the standard deduction, it’s worth itemizing. You can use whichever is most beneficial to you. Or you can choose to take the standard deduction and use it to lower your taxable income instead. You can itemize deductions, which means you list each deduction to which you’re entitled and subtract them from your taxable income. When you fill out your tax return, you have two main choices when it comes to deductions. To deduct real estate taxes, or any other type of personal property taxes, you need to itemize deductions on your tax return. Here’s the first thing you need to know about real estate tax deductions. You’ll need to itemize deductions to use it Your taxes are paid when the money is actually sent to your local government, not in the tax year when you paid the money into your escrow account as part of your mortgage payment. 2020, any real estate tax deduction would occur on your 2020 tax return, even though the taxes were billed in 2019.Īlso keep this in mind if you pay your taxes in two or more installments. If you get your 2019 real estate property tax bill in October and don’t pay it until Jan. One important point is that real estate taxes are deductible in the year they’re paid, not the year when they’re assessed. It doesn't include property taxes on any investment properties you own, although that's generally deductible in another way, which we’ll get into later. This includes taxes that you pay for ownership of your primary residence, a vacation home, and undeveloped land. Real estate taxes are still deductible on your tax return. Real estate taxes are still deductibleįirst, the good news.

    the art of deduction is real

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    Here’s what you need to know about the current state of the real estate tax deduction and how to determine whether you can use it or not. tax code, the real estate tax deduction is complex - especially since the Tax Cuts and Jobs Act. One silver lining is that you can potentially get a nice tax deduction for the real estate property taxes you pay. Nobody likes paying taxes on real estate, especially if you live in a high-tax area of the United States.











    The art of deduction is real