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Step 1
Understand that there are two kinds of property tax deductions: real estate property taxes and personal property taxes.
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Step 2
Deduct personal property taxes based on the value of personal property like a boat or car. The state you live in assesses this annual charge.
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Step 3
Learn that real estate taxes include any state, local or foreign taxes on real property. These annual property taxes are based on assessed value by the city, county or state.
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Step 4
Investigate itemizing your tax deductions if you normally take the standard deduction. Homeowners, in particular, often save money by itemizing. Schedule A is the itemization form that includes information about deducting property taxes.
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Step 5
Find out how much you paid in property taxes through payments made to a city or county. Your property tax bill might come from the county assessor's office. These bills often come due at the end of the year.
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Step 6
Review year-end tax summaries provided by your mortgage company or bank if you pay real estate taxes each month through an escrow account. Escrow accounts often collect real estate taxes and homeowner's insurance, but you can only deduct the real estate taxes actually paid from the account for that tax year.
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Step 7
Remember to include any real estate taxes you reimbursed a seller for if you bought a home during the tax year. Property taxes for second homes also qualify for property tax deductions.
