Property tax payment and deduction in joint ownership

[San Diego]

I co-own a house with a friend. We are not married and file separately.

If I want to take the property tax deduction on my tax returns, do I have to pay the taxes or can my friend pay them? Do I need to reimburse him? Thank you

[xmasbaby0]

CO-OWNING A HOME

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-deductions/deduct-mortgage-i...

[Opus 17 · Accepted solution]

To deduct property taxes, you must be a legal owner of the property, and you must be the person who actually pays the taxes.  

There is nothing in particular that says you must pay the city or county directly yourself, it would be acceptable for you to reimburse the other owner if they paid the tax at first.  But if audited, you would have to prove it.  It would be easier to prove if you directly paid the city or county. 

[xmasbaby0]

And...as for whether it will even matter if you enter your property tax or mortgage interest-----

It is very hard for a lot of people to use itemized deductions now that the standard deduction is so much higher.  Your home ownership may not have any effect on your tax due or refund, especially if you purchased the house late in the year.  

Standard Deduction

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach.  The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes. 

2024 STANDARD DEDUCTION AMOUNTS

SINGLE $14,600    (65 or older/legally blind + $1950)

MARRIED FILING SEPARATELY $14,600    (65 or older/legally blind + $1550)

MARRIED FILING JOINTLY $29,200    (65 or older/legally blind + $1550)

HEAD OF HOUSEHOLD $21,900    (65 or older/legally blind + $1950)

Home Ownership

There is not a first time home buyers credit on a Federal return. That ended in 2010. If your state has such as credit, you will be able to enter it when you prepare your state return.

Buying a home is not a guarantee of a big refund.  Your deductions for homeownership combined with your other deductions (if any) must exceed your standard deduction to change your tax due or refund. If you purchased your home late in the year, you do not even have a full year of home

ownership deductions.

Your closing costs on your new home are not deductible except for prepaid interest, prepaid property tax or loan origination fees.  There are no deductions for appraisal, inspections, title searches, settlement fees. etc.

Your down payment is not deductible.

Your homeowners insurance for fire, hazard, flood, etc. is not deductible for your own home.

Home improvements, repairs, maintenance, etc. for your own home are not deductible.  (With possible exceptions for certain energy credits) (BUT——do make sure you keep careful written records/invoices, etc.  of any improvements you make to the home for someday when you sell it.)

Homeowners Association  (HOA) fees for your own home are not deductible.

Go to Federal> Deductions and Credits> Your Home to enter mortgage interest, property taxes, and loan origination fees (“points”) that you paid in 2024  You should have a 1098 from your mortgage lender that shows this information.  Lenders send these in January/early February.

[San Diego]

Thank you, all, for taking the time to answer my question so quickly and also offering advice on what other deductions I can and cannot take. Truly appreciate this community!