The IRS has recently approved a higher standard deduction for taxes paid on local real estate.  Concerns that home owners paying state or local real estate taxes then finding themselves unable to file itemized deductions for the expense prompted the increase in the new standard deduction.

There are six qualifying factors to receive the higher standard real estate tax deduction, and they are as follows:  1.)  The deduction must be equal to or less than the taxes paid, or $500 for single homeowners, and $1,000 dollars for joint filings, whichever is smaller.  2.)  They must be real estate taxes that were imposed on you.  3.)  You must have paid your tax bill.  4.)  The taxes must be levied for public welfare and be based on the assessed value of the property.  Taxes relating to improvements to property, such as assesments for street, sidewalk or sewer repairs do not qualify for the deduction.  5.)  Taxes paid for foreign property, or commercial property do not qualify.  6.)  You must file with a 1040 or 1040A and attach a form titled “Schedule L” which pertains to the “standard deduction for certain filers”.

For more information please visit the IRS.gov site where you can view and download all applicable forms and instructions, or call 1-800-TAX-FORM.