Real estate taxes (also called "property taxes") for your main home, vacation home, or land are an allowable deduction if they are based on the assessed value of the property and the property is for your own personal use. Whether you'll actually get a deduction on your taxes is another story, as several changes enacted by tax reform have impacted this deduction.
For one, you won't be able to deduct your property taxes if you're taking the standard deduction, and our estimate is that 90% of taxpayers will be doing that this year, up from 70% last year.
Even if you itemize, the SALT deduction, which includes property tax, is now capped at $10,000 ($5,000 for couples filing separately). This means taxpayers who live or own property in states with high property taxes may not be getting as big a deduction as they have in years past.
That said, you should still enter your property taxes in TurboTax; we'll figure out what amount, if any, is deductible. Be sure to include property taxes paid at closing as well as the annual property tax paid to your assessor.
- Taxes you paid on property you don't own;
- Taxes for rental or business property (instead of entering them in the Deductions & Credits section, you'll claim them as expenses when you get to the rental or business section);
- Taxes for local improvements, like streets or sidewalks;
- School taxes, unless they are based on the assessed value of your property;
- Taxes for trash collection, libraries, or anything else not directly related to assessed property value;
- Taxes on foreign property (tax reform has been suspended this deduction for tax years 2018 through 2025).
- If your property taxes are included in your monthly mortgage bill, you can deduct them after your lender has paid the tax to the assessor on your behalf. Contact your lender to find out when they submit your property tax payments (frequently this is done twice a year, but it varies among jurisdictions).
- If you're a member of a co-op, only claim your share of the amount paid by the corporation.
- If you co-own the property with others, split the deduction by what each person paid.