Did You Know: Number of Taxpayers Taking the Real Estate Tax Deduction

November 5, 2009

By Danielle Hale, Research Economist

• The table below is based on IRS data for 2007. According to this data (which differs slightly from other reported national figures due to processing differences), the number of filers claiming a deduction for real estate taxes paid in each state varied from 55,928 in North Dakota to 5,344,121 in California. The states are ranked based on the number of tax filers claiming a deduction for real estate taxes paid. Nationally, based on data from IRS table 2, the number of those deducting real estate taxes paid is 44,003,106.
• When they file, taxpayers have the option of claiming a standard deduction, based on their filing status, or itemized deductions, the amount spent on the set of allowable deductions. To claim itemized deductions, the taxpayer must keep records to substantiate the deductions taken.
• Only taxpayers who itemize deductions may take a deduction for real estate taxes. While other considerations such as eligibility, ease of filing, and required record keeping may factor into whether a filer takes the standard deduction or itemizes, generally, taxpayers take whichever is larger. In 2007, standard deduction amounts were $5,350 for single filers, $10,700 for married-joint filers, $5,350 for married-separate filers, $7,850 for head of household filers, and $10,700 for qualified widows. Standard deductions are higher for the elderly and blind.
• “Other Areas” includes, for example, returns filed from Army Post Office and Fleet Post Office addresses by members of the armed forces stationed overseas; returns filed by other U.S. citizens abroad; and returns filed by residents of Puerto Rico with income from sources outside Puerto Rico or with income earned as U.S. government employees.
• These tax returns are of various filing statuses including married filing jointly, married filing separately, head of household, surviving spouse, and single.

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