IRS announces Additional Standard Deduction Amounts for Eligible Taxpayers in 2008!
IRS has announced that eligible Taxpayers may qualify for the Additional Standard Deduction Amount for Property Taxes.
In prior years, if a Homeowner (Taxpayer) did not have enough itemized deductions to exceed their standard deduction, he or she always elected to claim a standard deduction which resulted in the lowest federal income tax. However, after the passing of the "Housing Assistance Tax Act of 2008", taxpayers who are homeowners would now be eligible to "claim an additional standard deduction for property tax if the taxpayer does not itemize. The additional amount is limited to $500 or $1,000 for joint filers."
According to the IRS, this deduction is "claimed as an additional amount on top of their standard deduction." But, the additional amount that can be claimed is the lower of the following two figures:
a)the amount of real estate property taxes paid during the year to state and local governments; or
b)$500 ($1,000 for married taxpayers filing a joint tax return).
The result of this may be potentially increase tax refunds to homeowners that have recently purchased homes and will provide much needed tax relief to struggling families coping with the current financial crisis who have not been itemizing on their tax returns.