When reviewing an article from www.BankRate.com, I noticed information on the Housing Bill that has not received much attention.
Property tax deductions for all homeowners: Under current law, you can deduct your property taxes from federal income tax but only if you itemize deductions on Schedule A. That leaves out people who don’t have enough standard deductions to warrant filling out Schedule A. They have to take the standard deduction which means that they can’t deduct their property taxes.
The housing rescue bill changes that. For homeowners who pay property taxes, it increases the standard deduction by $500 for single filers and $1,000 for couples filing jointly. This will be a boom to people, such as retirees, who own their house outright, and therefore don’t pay any mortgate interest, so they can’t itemize.
You can’t increase the standard deduction by more than the property tax bill. So, if you’re married filing jointly and you pay $800 in property taxes, you get an $800 deduction, not a $1,000 deduction.
Thanks to Graham Stiles at www.GrahamStiles.com for sharing the article.