Are school fees paid for building a home considered a school tax?

[erikdsar]

In 2023 I built a 2nd home.  I paid building permit fees and a large school fee on the home that was built.  Is this school fee considered a tax?  The reason I ask is because Turbotax indicates that school taxes paid to build a home are a tax deduction.  Can someone clarify this for me or direct me in the right direction?

[Vanessa A]

What type of school fee?  Building permit fees are not deductible as a tax, but can be added to the cost basis of your home for when you sell it.  School taxes are deductible taxes, unless it was some type of fee to the school for another permit or something.  

If these are school taxes, they are only deductible if you itemized your return. 

Itemized expenses include mortgage interest,  charitable contributions, state and local taxes up to $10,000, medical expenses in excess of 7.5% of your AGI and casualty and losses in excess of 10% of you AGI with the first $100 not counting towards the loss.  Your health insurance and all medical expenses are only deductible for the amount that is over 7.5% of your AGI.  This means if your AGI is $50,000, then the amount that is over $3,750 is deductible.  

Then your total itemized expenses would need to be greater than your standard deduction below in order to benefit from your insurance premium payments. 

The 2023 Standard Deductions are as follows:

• Married Filing Joint (MFJ)              $27,700
• Married Filing Separate (MFS)      $13,850
• Head of Household (HOH)             $20,800 
• Single                                                     $13,850                                

Blind and MFJ or MFS add $1,500

Single or HOH if blind add $1,850

Standard versus Itemized Deduction

[erikdsar]

Hi Vanessa.  Thank you for your response.

The school fee I paid was paid to the school district.  I paid a certain amount of money based upon the square footage of the home I built, x a fixed dollar amount per square footage.  In my case over 5K. 

I use TurboTax  so it calculates (I think!) whether standard or itemized deductions are better for us (married filing jointly).  Before the Trump tax reforms, it seems that TurboTax itemized our deductions.  Since then, Turbotax indicates that the standard deduction is better.