Traditionally, taxpayers who owned homes could only deduct state and local real estate taxes if they opted to itemize their deductions. However, for the tax years 2008 and 2009, taxpayers who opt for the standard deduction are getting a break: there is an additional standard deduction for those who pay state or local real estate taxes.
To qualify for the deduction, you must file a form 1040 or form 1040A. You’ll take the deduction by checking line 39c of form 1040 or line 23 of form 1040A.
You can claim an amount up to the smaller of the actual real estate taxes paid or $500 for individual taxpayers ($1,000 for married taxpayers). Only taxes based on assessed value for the property are deductible; you can’t deduct additional local taxes such as assessments for sidewalks or sewers. Additionally, the property must be US residential property: foreign properties and business properties don’t count.
While this break won’t apply to everyone (since those who have mortgages will likely itemize their taxes), it could be appealing to homeowners who have paid off their mortgage – or are nearly finished paying off their mortgage. Lucky you!
This is a great deduction this year.. few people would really make use of this though.
If you look on your form 1040 the there is no line 39c. The line you are talking about is line 40b.
“To qualify for the deduction, you must file a form 1040 or form 1040A. You’ll take the deduction by checking line 39c of form 1040 or line 23 of form 1040A.”