2008 property tax break

Homeowners get a new break on property taxes

If you pay property taxes but don't have enough deductions to itemize, Congress has given you a new break for 2008 and 2009.

Congress has given taxpayers who don't itemize their deductions -- but do owe property taxes -- a little break for 2008 and 2009.

If you're one of those taxpayers, you can deduct the lower amount of the property tax bill or $500 for single taxpayers and up to $1,000 for joint filers.

So, if you're married filing jointly and have a property tax bill of $1,500, you will be able to deduct $1,000. If your bill is $900, you can deduct the $900.

The way you get the deduction is to add it to your standard deduction. For joint filers, that's $10,900 in 2008, $5,450 for singles and $8,000 for heads of households.

In 2009, the standard deduction rises to $11,400 for joint filers, $5,700 for singles and $8,350 for heads of households.

This little break will be especially helpful to homeowners 65 and older who often don't have enough in deductions to itemize. They also get a break for their age: $1,350 for single taxpayers and $1,050 for each joint-filing spouse.

This break came in two pieces, as columnist Humberto Cruz noted. The July Housing Assistance Tax Act put in the break for 2008. The Emergency Economic Stabilization Act -- the financial bailout bill, passed in October -- extended the break for 2009.

Property taxes, along with mortgage interest, charitable deductions and medical expenses beyond a certain amount, are among common expenses that can be claimed as itemized deductions.

For more information, see IRS Publication 17: Your Federal Income Tax, Part Five (.pdf file).

Published Dec. 10, 2008

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