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ssaharan
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I paid $10022 in property taxes on main home in 2021, however entering this in TurboTax is not reducing my Federal tax liability. It did reduce my CA state tax liability.

 
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2 Replies

I paid $10022 in property taxes on main home in 2021, however entering this in TurboTax is not reducing my Federal tax liability. It did reduce my CA state tax liability.

taxes are capped at $10,000 so if you had other deductible taxes such as state income taxes of $10K or more the real estate taxes deduction will produce no tax benefit.   the other case is where your itemized deductions are less than your standard deduction.

 

I paid $10022 in property taxes on main home in 2021, however entering this in TurboTax is not reducing my Federal tax liability. It did reduce my CA state tax liability.

1)  First, your total of the already entered potential itemized deductions, need to have exceeded your standard deduction before they start to take effect.  Maybe that money didn't put you over the Federal Itemized deduction level yet.

...OR...

2) The state tax withholding you entered on the income page? If that already exceeded $10,000, then adding additional property taxes would have no effect.  State taxes paid (i.e. State withholding +State Quarterly Estimates paid in 2021) + Property taxes paid is capped at a $10,000 Federal income deduction.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

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