As homeowners work to finish and file their tax returns, it’s important to note that 2017 returns may be the last opportunity to deduct real estate taxes on the federal income tax return. Under prior tax laws, taxpayers who itemized their deductions were allowed unlimited state and local tax deductions, including real estate taxes. The new tax law limits state and local income and real estate tax deductions at a combined total of $10,000.
High income homeowners will likely meet this limit with state and local income tax deductions, which means real estate tax payments will no longer be deductible.
Homeowners who don’t meet the $10,000 limit may no longer itemize deductions at all, as the standard deduction has been nearly doubled to $12,000 for single filers and $24,000 for married homeowners.
The bottom line
As always, consult an income tax advisor with regard to income tax issues. If a homeowner finds they are no longer able to deduct real estate taxes as a result of these changes, taking steps to minimize the property bill is now even more important than in the past.
Real Estate Tax Appeals can be filed in 2018 on properties that were not appealed in 2017, but the deadline is quickly approaching. Appeals in Missouri need to be filed by July 9, 2018.
PAR Residential can handle all aspects of the appeal process. The company has represented property owners in over 15,000 appeals since 2009, resulting in more than $9 million in real estate tax savings. There is a good chance homeowners are paying too much in real estate taxes and should take advantage of an appeal process.