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Your income property tax deductions will vary, depending on your personal tax situation. Taking a deduction, whether for property taxes or any other allowable deduction, is usually advisable. Deductions are reductions of income. For example, let’s assume someone earns $35,000 per year, and is able to take a deductions totaling of $8000. The new taxable income is $35,000 minu $8,000, or $27,000.
These deductions take gross income and turn it into adjusted gross income (AGI). Your taxable rate is based on your AGI, less any credits that can be applied. For the example above, the new tax rate is based on the $27,000 income.
Carry Forward of a Deduction
If a tax filer does not have a need for a property tax deduction, they are able to carry the deduction forward for a period of up to 5 years from the date of the deduction. This allows the taxpayer a chance to apply the deduction in subsequent years.
This can be an important benefit for taxpayers because yearly income can range. If for example, you are receiving a refund for one year, but know that your income will be higher next year, you can gauge the deduction to work in your favor.
