Can I Claim My Property Taxes on a Standard 1040?

You can deduct your property taxes only if you file form 1040.

Tax deductions are itemized on Schedule A of form 1040 and serve to reduce the income you pay taxes on. Property taxes are among the deductions you can claim. Schedule A can only be filed if you use form 1040 for your income tax forms. Other tax forms, including form 1040EZ and 1040A, require you to take the standard deduction.

Types of Property Taxes

You can deduct both your real estate taxes and your property taxes using Schedule A. Real estate taxes include any taxes on real property based on the value it is assessed at by a state, local or foreign government. Personal property taxes that are assessed based on the value of the item, such as a automobile or boat, also qualify for an income tax deduction. For example, a flat fee to register your car would not be deductible because it is not based on the value.

Reporting Your Deduction

Both real estate taxes and personal property taxes are deductible on Schedule A. Real estate taxes are reported on line 6. You can only include the amount actually paid for the year. For example, if you pay into an escrow account with your mortgage lender for your real estate taxes, you can only deduct the amount that actually gets used, not the amount you put in. For personal property taxes, you report the amount on line 7.

Impact on Your Taxes

The personal property taxes and real estate tax deduction values are combined with all of your other itemized deductions. This total, reported on line 29 of Schedule A and copied to line 40 of your form 1040 income tax return, lowers your taxable income for the year. The effect on your tax liability depends on your income tax bracket. For example, if you fall into the 15 percent tax bracket, a $1,200 deduction would save you $180. That same $1,200 deduction would save you $360 if you fall in the 30 percent tax bracket.

Warnings

When you claim your personal property and real estate taxes by itemizing your deductions, you have to give up your standard deduction. The value of your standard deduction varies based on your filing status. If your standard deduction is worth more than your itemized deduction total, including your personal property and real estate taxes, you will actually save more on your taxes by forgoing those deductions in favor of the standard deduction.

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