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Tuesday, December 14, 2010

Tax Tip - Property Tax Deductible in 2010

Personal property taxes, both on real and personal, are deductible for those who itemize deductions on Schedule A of form 1040.  For years 2008 and 2009 there was a provision for a deduction up to $1,000 for those using the standard deduction.  This provision expired for tax years beginning after 2009.   Cash-basis taxpayers, generally all 1040 filers, deduct taxes paid during the year by December 31, 2010.  Documenting payments made close to December 31, 2010, is important.  In some states, counties access property tax on vehicles during the license process.  So, in some cases, property taxes may be paid several times during a year.  On some mortgaged real estate, a property tax factor is paid into an escrow account when mortgage payments are made.  Most escrow agents will pay real estate property taxes during the year accessed.  When paid direct, receipt of payment helps ascertain that a check payment was for property tax.

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