The meaning of Property Tax Deduction. State and local property taxes that are generally deductible from United States federal income taxes. These include real estate taxes, which include any state, local or foreign taxes that are imposed for the welfare of the general public. Deductible real estate taxes generally do not include taxes charged for home renovations or for services like trash collection. Recent news, Sen. Kirsten Gillibrand will introduce the Homeowner Tax Fairness Act. The legislation would allow homeowners that pay property taxes to deduct the full amount of money they pay from their federal income taxes.
Only those that itemize their federal taxes can deduct the cost of property taxes right now. In central New York, the new property tax deduction could benefit nearly 120,000 homeowners, saving them a total of $75 million, found a report issued by Gillibrand. The report estimates 8,109 homeowners in Cayuga County who don’t itemize their federal tax returns could save an average of $621.50 as a result of the property tax deduction.
Overall, the estimated amount saved for Cayuga County from the property tax deduction is more than $5 million, according to Gillibrand’s report.
Gillibrand acknowledged the burden of property taxes in New York and says her legislation will help New York homeowners who need property tax relief “make ends meet".
In 2008, Congress temporarily allowed non-itemizing taxpayers to deduct their property taxes to help deal with the housing crisis, according to Gillibrand. That deduction was capped at $500 and it expired at the end of 2009.
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