The IRS wants taxpayers who pay state or local real estate taxes but don’t qualify to itemize their tax deductions, to know that they may qualify for an increased standard deduction. This is the last year that the higher standard deduction for real estate taxes is available.
Here are six things you need to know about the higher standard deduction for real estate taxes:

1. The additional deduction amount is equal to the amount of real estate taxes paid, or $500 for single filers or $1,000 for joint filers, whichever is less.
2. The taxes must be imposed on you.
3. You must have paid the taxes during your tax year.
4. The taxes must be levied for general public welfare on the assessed value of the real property and charged uniformly on all property under the jurisdiction of the taxing authority. Many states and counties also impose local benefit taxes for improvements to property, such as assessments for streets, sidewalks and sewer lines. These taxes usually cannot be deducted.
5. Real estate taxes paid on foreign or business property do not qualify for the increased standard deduction.
6. You must file a Form 1040 or 1040A and attach Schedule L, Standard Deduction for Certain Filers, to claim the increased deduction. When claiming the higher standard deduction for real estate taxes, be sure to check the box on line 40b of Form 1040 or line 24b of Form 1040A.

For more information, see Form 1040 or 1040A Instructions and Schedule L instructions. The forms and instructions can be downloaded at IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Links:

• Form 1040, Individual Income Tax Return
• Form 1040, Instructions
• Form 1040A, Individual Income Tax Return
• Form 1040A, Instructions

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Can previous years real estate taxes paid in 2009 be used? This would of course include penalties and interest, can this be included?

I am getting a flag telling me to verify the amount I am using.

The penalties and interest are never deductible but if you paid any real estate taxes pertaining to your principal residence or your second home in 2009, then even if these were delinquent taxes pertaining to the prior years, these real estate taxes would be deductible in 2009.

The flag you are getting is perhaps because the amount you are deducting as real estate taxes are unusually large but you can generally deduct these taxes on schedule A.

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Ask TaxGuru Please refer to the legal disclaimer.

An Alternative Minimum Tax (AMT) is imposed by the United States Federal government on individuals, corporations, estates, and trusts. AMT is computed at 26% or 28% for individuals and 20% for corporations on taxable income as adjusted for AMT. Taxpayers are allowed a flat exemption amount but not personal exemptions or the standard deduction. The exemption of $70,950 for married couples filing jointly, $46,700 for single individuals, and $40,000 for corporations is phased out at higher incomes. Individuals may not deduct taxes or miscellaneous itemized deductions. Depreciation deductions are computed using longer lives and slower methods. Other adjustments apply. The AMT rate for capital gains and qualified dividends currently is the same as the regular tax rate for such items. A foreign tax credit and eight other business credits are allowed to reduce AMT.
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Earl

Hi,
For 2010, the standard deduction for married taxpayers filing a joint return ... Workers age 50 and older in 2010 can put in an additional $5500, ... But the credit for fuel cell property cannot exceed $500 per half-kilowatt capacity. ... can be based on the lesser of 90 percent of tax liability for 2009 or 2010.
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melkinny

Hi,
15 Jan 2009 ... The IRS offers these tax tips for you to consider: ... Real Estate Tax Deduction — There is an additional standard ... The additional deduction amount is equal to the amount of real estate taxes ... This deduction is available for the 2008 and 2009 tax years and increases your standard deduction.
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melkinny