Question

What is the tax consequence of these taxes, and where on the draft forms does the deduction go?

The Schnappaufs pay the following property taxes:

Wakefield house $11,200.

Family car used by Bill (ad valorem) $480.

Joyce's car (ad valorem) $175

Answer 1

Total deductions are 11200+480+175=11855.

Standard deduction for 2017 individual=$6350 Couple filing jointly=$12,700 for head of household=$9,350

If they are couple filing jointly=

Property Tax deduction on the Wakefield house can be claimed under itemized deduction on Form 1040 Schedule A if the house is being used for personal use and tax is paid on assessed value.

The ad valorem portion of annual auto registration is deductible on Form 1040 Schedule A

Itemized deductions may be limited and total itemized deductions may be phased out (reduced) if your adjusted gross income for 2017 exceeds the threshold amounts for the filing status. The amount of Adjusted Gross Income on form 1040 for Married filing jointly being $313,800. and $287,650 for head of household for eligibility to claim itemized deductions in place of standard deductions.

Ad valorem is a Latin term meaning according to the value. Ad valorem tax is levied on personal property and a calculated on the basis of the value of the item as assessed. Personal property taxes on real estate and boats and cars to increase revenue for the goverment with the internal revenue service allowing taxpayers to write of ad valorem taxes on the tax returns under itemized deduction. the tax is deductible and itemized deductions only if it is paid for the current year in which it is claim and write off for ad valorem taxes can only be availed if filing and the IRS form 1040 and itemized deductions.

Personal property tax can only be deducted if the owner of the property is eligible to itemized deductions which occurs when the eligible itemized deductions are greater than the standard deduction allowed in a given tax year. The condition of the property being used for personal use and being assessed along with the tax payment being on an annual basis also apply. Under the new Republican tax bill or state and local taxes including property taxes allowed for maximum deduction upto dollar 10,000 combined. Which standard deduction being increase to $12000 in 2018 for individuals and dollar $12700 for couples most individuals will be unable to itemize deduction.