24 Apr Property tax deduction when filing separate returns
Q. I am married and filing separately to be able to claim the pension exclusion. My question concerns the deduction for property taxes. When filing separately, can my wife and I claim half of the property tax deduction?
Joint property is owned, by definition, by both spouses.
When spouses file separate federal tax returns, the deduction can be allocated between them, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.
He said each spouse is limited to a maximum of $5,000 for all of his/her state and local taxes – the SALT deduction – under the new tax plan.
For your New Jersey state taxes, Karu said, when a property is jointly owned, if separate returns are filed, each can only claim up to half of the property taxes.
“For example, if two sisters own a house together but only one had income during the year, she would be limited to taking 50 percent of the real estate taxes as a deduction on her New Jersey tax return,” Karu said.
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This story was originally published on April 24, 2019.
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