Tuesday, December 16, 2008

2008 Tax Time is here - Do it FREE online

2008 Property Tax Deduction for Taxpayers Who Don't Itemize Updated: 11/19/2008
Tax break applies to years 2008 and 2009
Property owners who use the standard deduction, rather than itemize their individual deductions when filing their income taxes, will get a new tax break for tax years 2008 and 2009.

A chance to deduct property taxes
Prior to 2008, only taxpayers who itemized their deductions – that is, listed certain expenses such as mortgage interest to reduce their overall tax liability – could deduct state and local property taxes. Those who took the standard deduction, or a fixed amount of income not subject to tax, could not.

Limits set on deduction amount
However, for 2008 and for 2009, non-itemizers will be allowed to take a limited property tax deduction, up to $500 for single taxpayers and up to $1,000 for married couples filing jointly.

A couple in the 25 percent tax bracket would save $250 in taxes, while a single filer in the 25 percent bracket would save $125.

The deduction is determined by whichever of the following is lower:
The amount of property taxes paid, or $500 for single taxpayers or $1,000 for married, filing jointly.

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