, Answering FAQ'sTurboTax Employee
You can get a federal tax deduction for the state and local taxes you pay on real estate that you own, such as your main home, a vacation home or bare land. Commonly (although incorrectly) called "property tax," this real estate tax is paid directly to the tax assessor or through an escrow account set up by your mortgage company.
To qualify for the deduction, you must own the property and you can claim only the amounts you paid in the given tax year. You can still take a federal tax deduction on the real estate taxes you paid in states without an income tax.
Note: For real estate taxes on rental property, see Rental Property Income & Expenses.
Where do I confirm how much real estate tax I paid?
If you paid your real estate tax payments to an escrow account as part of your regular mortgage payments:
- Look on your year-end Mortgage Interest Statement or Form 1098. It could be reported in a box on the form itself (separate from the interest amount) or on other paperwork you receive with your Form 1098.
- You could receive a breakdown, showing how much you paid into the escrow account and how much was paid toward your real estate tax. Keep in mind, you can deduct ONLY the amount paid toward your real estate tax bill.
- If you can’t locate the tax payment, call your lender.
If you paid the taxes directly:
- Look through your financial records, or
- Go online to your county’s tax assessor website, or
- Call your tax assessor’s office.
Can I claim taxes I paid in a prior year?
In most states, you don't actually pay your taxes for a particular year until early the following year. You can only deduct real estate taxes in the year you paid them, regardless of the year the taxes apply to.
For example, if you didn't pay your 2012 real estate taxes until 2013, you'd deduct them on your 2013 return (minus any late fees and interest).
Similarly, if you pre-paid your 2014 real estate taxes in 2013, you get to deduct them on your 2013 return – not your 2014 return.
For the year you purchase a property, you can take a deduction for the total real estate tax you pay in that year, less any credit the seller gave you for real estate taxes at the closing. Likewise, as a seller you can deduct any real estate taxes you paid at closing (the tax payment you are providing to the buyer).
Where do I enter real estate taxes in TurboTax?
To enter real estate taxes you paid for your main home, a vacation home, or land:
- Select Federal Taxes (Personal in the Home & Business edition).
In Online TurboTax, click the bars at the upper left corner to show Federal Taxes on the selection list; enlarge the screen if needed to show the left side selection list.
- Select Deductions & Credits, and in the next screen, click I'll choose what I work On.
- Scroll down the Deductions & Credits screen to the Your Home group.
- Click on the Start/Update button next to the Property Taxes category.
- Follow the prompts.
- What's the difference between "property tax" and "personal property tax"?
- Schedule A, Itemized Deductions
- Form 1098, Mortgage Interest Statement