What Property Owners Ought to Know About Deductible Nonbusiness Taxes

  • There are four types of deductible nonbusiness taxes
    • State and local real estate taxes
      • Yearly taxes paid on a home can be claimed on the homeowner’s tax return.
      • In Florida, homeowners must file a schedule A for itemized deductions on their tax return.
        • Some of the charges that can’t be itemized are:
          • Fees for the delivery of a service, such as water, or trash collection
          • Flat fees to satisfy fines, such as a charge to mow your lawn that wasn’t compliant with local law
          • Assessments for local benefits, such as a charge to construct a sidewalk outside your house
        • In Miami-Dade County, homeowners can deduct costs of maintenance and repairs only if the county included those costs on their tax bill.
    • State and local personal property taxes
      • Yearly taxes paid only on the fair market value of personal property such as a boat or car.
      • Some taxes and fees you can’t deduct on Schedule A include federal income taxes, social security taxes, transfer taxes (or stamp taxes) on the sale of property, homeowner’s association fees, estate and inheritance taxes, and service charges for water, sewer, or trash collection. 
    • State and local general sales taxes
      • Taxes based on the sale of individual sales of items.
      • Florida’s general sales tax is 6% with the following exceptions: 4% on amusement machine receipts, 5.5% on the lease or license of commercial real property, and 6.95% on electricity.
    • State, local, and foreign income taxes
      • State and local income taxes withheld from your wages during the year appear on your Form W-2, Wage and Tax Statement.
      • You can elect to deduct state and local general sales taxes instead of state and local income taxes, but you can’t deduct both. 
  • NOTE: Your deduction of state and local income, sales, and property taxes is limited to a combined total deduction of $10,000 ($5,000 if married filing separately). 

Credit: IRS ; TurboTax

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