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2008 Property Tax Deduction for Taxpayers Who Don’t Itemize
Tax break applies to years 2008 and 2009
Property owners who use the standard deduction, rather than itemize their individual deductions when filing their income taxes, will get a new tax break for tax years 2008 and 2009.
A chance to deduct property taxes
Prior to 2008, only taxpayers who itemized their deductions – that is, listed certain expenses such as mortgage interest to reduce their overall tax liability – could deduct state and local property taxes. Those who took the standard deduction, or a fixed amount of income not subject to tax, could not.
Limits set on deduction amount
However, for 2008 and for 2009, non-itemizers will be allowed to take a limited property tax deduction, up to $500 for single taxpayers and up to $1,000 for married couples filing jointly.
A couple in the 25 percent tax bracket would save $250 in taxes, while a single filer in the 25 percent bracket would save $125.
The deduction is determined by whichever of the following is lower:
The amount of property taxes paid, or $500 for single taxpayers or $1,000 for married, filing jointly.