Why do I need to pay extra tax to the state that I have rental?

[Mvvei]

I live in Texas and I have a rental in North Carolina, and I pay 1% real estate tax to NC each year. When I do the state tax return in Turbotax, there is no place for me to enter the tax that I have paid to NC, and by then end it says 

$0

NC TAXES ALREADY PAID

And I ended up owing NC for some extra tax money. Is this correct? 

[DianeC958]

The amount you pay for the real estate tax is deductible as part of the expenses for the rental.  The real estate tax does not pay any individual income tax you may owe North Carolina.

If you have a profit from the rental, then Yes, it is possible that have a balance due to the state of North Carolina.

If you made Estimated Payments to the state of North Carolina, you can enter those in the Federal Section of TurboTax.

Go to

• Deductions & Credits
• Estimates & Other Taxes Paid
• Estimates

[Carl]

Real estate taxes are paid to your local county. Income taxes are paid to your state and the federal government.

In your case, the real estate taxes (sometimes referred to as property taxes) have absolutely no relation or connection with your state income taxes.

Real estate taxes are paid to the local county and are a valid expense on the SCH E line 16.

State taxes are "income" taxes collected by the state. Unless you pre-paid money to the state (not the local county) your pre-paid taxes are ZERO.

Property tax - Has absolutely nothing to do with your income. This tax is based on the value of the property as determined and assessed by the local county property appraiser.

Income tax - Has *EVERYTHING* do do with your income and nothing to do with the assessed value of your property.

[NCperson]

NC begins its assessment of your income tax with the Federal Adjusted Gross Income (AGI).  Since presumably you listed the Real Estate Tax on Schedule E, it's already netted out once the  AGI is calculated.  Nothing further to do.