As a California taxpayer, you are likely familiar with the property tax as well as California income tax system in our state.
Property taxes are an important source of revenue for local governments, and they play a significant role in funding public services.
This article provides an overview of Can you Deduct Property Taxes in California?
Contents
Deducting Property Tax in California On Federal Form 1040
California Property taxes are generally still tax-deductible for both Wage Earners as well as self employed individuals.
Starting 2018, this year the deduction is subject to a total CAP of $10,000, ($5,000 if married filing separately)
Which includes
California property taxes
California State Income Taxes
Local Taxes(Such as DMV, State Disability Insurance SDI)
or sales taxes paid during the year
For example if you paid total of 12,000 that includes all the amounts for above items, you can only deduct $10,000 on your tax return.
What form is used to deduct Property Taxes?
If you itemize deductions on your federal 1040, you will deduct California Property Taxes on Schedule A.
You will use Line 5 B on Schedule A to report any property taxes you paid within the year(Jan 1 to Dec 31st)
Can I deduct Property Taxes Paid by my Mortgage Company?
Yes. If your monthly mortgage payments include your home or property real estate taxes, you can include only the amount the mortgage company actually paid to the taxing authority within the year (Jan 1 to Dec 31st)
Final Thoughts
In this blog post, we’ve answered the question of whether or not you can deduct your property taxes in California.
We’ve also outlined the maximum amount that you can claim as a deduction.
If you have any other questions about property taxes or deductions, please continue reading our blog or consult with your Tax Advisor or your CPA. We have a wealth of information that can help you save money on your tax bill.
Learn More
California Income Tax Withholding Form (DE 4 Form) Ultimate Guide
