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Visitor II

How come the property tax (primary home) doesn't make any difference in my Federal Tax.

I am using Turbox tax 2017 software to file my taxes.

In the deductions section, I entered under "Your Home" section, "Property taxes" section, I entered 10800$ as my property tax. But it doesn't make any difference in my Federal Tax. But CA state tax reduced by 1800$. Thats all. Our combined AGI is 260K for 2017 year.

 

Any suggestions on why I can't deduct property tax from my federal income?

4 Comments
TurboTax Specialist

How come the property tax (primary home) doesn't make any difference in my Federal Tax.

Are you taking the itemized deduction? If not, that may be why you don't see a difference in the federal refund amount. The itemized deductions would need to be more than your standard deduction of $12,700 for Married filing jointly. 

 

This FAQ will explain other reasons why you may not see a change as well Why didn't my refund change when I entered my mortgage interest and property (real estate) tax?

 

NOTE: When your property/real estate taxes are included on your 1098, you’ll enter them as part of your Mortgage Interest. But, if they aren’t listed on your 1098, you’ll enter them separately as property/real estate taxes.

Visitor I

How come the property tax (primary home) doesn't make any difference in my Federal Tax.

Same problem here. I can see that it is using Itemized Deductions. I can see that the Federal tax changes if I add/remove Mortgage Interest. But it does not change at all for Property Tax (which is significantly high ~18K). At this point I am inclined to try another tax software. This seems like a bug in Turbo Tax 2017. I have the Premier version.

Visitor II

How come the property tax (primary home) doesn't make any difference in my Federal Tax.

Me too. Just changed (increased) property tax amount and tax due did not change!

TurboTax Specialist

How come the property tax (primary home) doesn't make any difference in my Federal Tax.

Another reason this could be happening is because your income is high enough to the point that you are subject to the Alternative Minimum Tax. 

 

Does your return show that you owe AMT (Alternative Minimum Tax)? If so, you don't be able to deduct property tax and it won't make a change in refund amount. 

 

In that instance, property tax is a deduction that is added back for AMT.  For every dollar you deduct that lowers your income for regular tax, that amount is added back to your income for AMT and would increase your AMT by the same amount so you will see no net change. Once you are subject to the AMT, there is no way around this.

 

In calculating the AMT, you cannot take itemized deductions for state and local income tax, real estate taxes and personal property taxes, even though these are deductible on your regular return.