New for 2008 and 2009, taxpayers who do not itemize can add to their standard deduction the cost of their real property taxes, not to exceed $500 ($1000 for taxpayers filing jointly).

Those who stand to benefit from this provision are taxpayers who pay property taxes but whose itemized deductions are less than the standard deduction.

Take for example, a retired married couple, both over age 65, who paid $2500 in property taxes and have no other significant itemized deductions. Prior to this law change, their 2008 standard deduction would have been $13000 (the $10,900 basic amount for joint filers plus $2100 as an additional amount for married couples both over 65). With the added real property tax deduction, the couple’s standard deduction is increased by the lesser of their property taxes or $1000. Therefore, for 2008, their standard deduction will be $14000. Assuming that they are in the 15% tax bracket, this will save them $150 of federal income tax.

Feel free to visit our website at www.EfileFlorida.com for additional tax tips and articles.

Categories: Strictly TAXES!
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