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Step 1
Deduct real estate taxes for your primary home and/or vacation home on Schedule A. You are entitled to deduct the taxes on your primary or vacation home only if your name is on the title of the property. If, for example, you are living in a home owned by a relative, you are not entitled to claim the taxes unless you are also on the title. The concept is that only those who are legally obligated to pay the taxes are entitled to the deduction.
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Step 2
Take the real estate tax deduction for residential or commercial rental property you own on Schedule E. On this rental schedule, you record rental income and all the expenses of the rental property, including the taxes. If you hold the property in a separate partnership, limited liability company, trust or corporation, you must file a separate tax return for this entity and claim the deductions on that tax return instead of your personal income tax return.
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Step 3
Use Schedule C to claim real estate tax deductions if you have commercial property used in a self-employed business. Schedule C is only for claiming income and deductions in a self-employed business. If you use a portion of your home for business, such as a home office, you may be able to deduct a portion of your property tax as a home office deduction against self-employed income on form 8829 (see Resources).
