We are moving to TX where there is no state income tax, but there is a large property tax. What is the up-side of this type of tax if any? Is the property tax deductible? If so, if we make $100k and pay $7k in property tax, how should it affect us? Any help would be great. Thanks.
2006-12-12 05:35:02 · 3 answers · asked by Meg K 1 in Business & Finance ➔ Taxes ➔ United States
Property taxes are deductible as long as you are able to itemize your deductions. The standard deduction for 2006 is $10,300, so if you total itemized deductions exceed this amount then you benefit.
Itemized deductions include, but not limited to, property taxes, charitable contributions, mortgage interest on personal residence, and medical expenses (with limitations).
If all you will have is the $7k in property taxes then you will not get any benefit from them.
2006-12-12 06:04:22 · answer #1 · answered by glibby3 2 · 1⤊ 0⤋
I don't believe the property taxes are deductable, but I do believe that it is cheaper than paying for a state tax and a federal income tax.
Also what size house are you looking at that has a $7k in property taxes?
2006-12-12 13:41:51 · answer #2 · answered by Jenna 3 · 0⤊ 2⤋
I agree with the previous answer.
Sounds like your filing status is Married Filing Joint, the standard deduction is $10300. If you have enough deductible items (i.e. property tax, real estate tax, medical expenses, charitable contribution etc) to exceed $10300 then itemize deduction will give you more beneficial tax treatment than standard deduction.
For a list of all deductible items and their rules, check out Publication 17, Part 5. http://www.irs.gov/pub/irs-pdf/p17.pdf
Best wishes.
2006-12-12 16:00:38 · answer #3 · answered by JQT 6 · 0⤊ 0⤋