 5B, state and local real estate taxes. So enter online 5B, the state and local taxes you paid on real estate you own that wasn't used for business. So this is the other big one, someone owns a home, that's the big one, you've got the mortgage interest on it and then you've got the sales tax related to it as well. So remember that the state sales tax, I mean the state taxes could be, what's their normal taxes, either they have an income tax or sales tax or both right and then you have the question of the deductibility of the state taxes there and then no matter where you live they almost certainly have a property tax, so a property tax on the home. So now we've got the home and the property tax no matter where you live that you would think there would be state and local property taxes. The property tax. Then the question is, is the property tax just a personal home in which case we're looking to take that property tax as a state and local tax deduction on the schedule A, if it was for business use you might be able to take it on the schedule C, if you use part of your home for business, home use of an office or something like that then maybe you have to have a ratio of your taxes we might talk about when we get to the schedule C but you can't double dip, you can't deduct both on the schedule C and on A or on, you know, home office deduction or whatever, so but only if the taxes are assessed uniformly at a like rate on all real property throughout the community and the proceeds are used for general community or government purposes. So you got publication 530 explains the deduction homeowners can take, so don't include the following amounts on line 5B, foreign taxes you paid on real estate so no foreign taxes we're not we're not subsidizing foreign taxes here so it's itemized charges for services to specific property or persons for example a twenty dollar monthly charge for house for trash collection five dollar charge for every one thousand gallons of water consumed or a flat charge for mowing a lawn that had grown higher than permitted under a local ordinance so those are more like fees it sounds to me then kind of like taxes or you're paying for something goods and services and taxes charges for the improvements that tend to increase the value of your property for example assessment to build a new sidewalk so if you're paying for an assessment to build a sidewalk then you're probably paying for you know an improvement in the home not being you know taxed for sales tax so the cost of property improvement is added to the basis of the property meaning you're increasing the value of the home so that when you sell the home you'll have less of a gain at the point in time you sell it and that's when you might have a tax benefit from it although the home would be most likely exempt anyways for a large portion of the game so it might not be all that beneficial to you but there it is however a charges deductible if it is used only to maintain an existing public facility in service for example a charge to repair an existing sidewalk and any interest included in that charge so if your mortgage payments include your real estate taxes you can include only the amount the mortgage company actually paid to the taxing authority so when you deal with your your property taxes you might pay the property taxes directly so meaning you have a home loan you're paying off the mortgage with the loan and then you pay the state and locality for your property taxes directly sometimes they package those together so that basically your mortgage payments are going to be paying for both your mortgage and then the mortgage company will actually be paying off the property taxes so that could be kind of convenient sometimes because then it's you know one less payment to not miss it maybe you won't miss but then and then the mortgage company should give you the documentation of 1098 which should give you the information in terms of how much you paid in mortgage interest and the real estate taxes just remember not to miss that because anytime someone owns a home you would expect that they would have property taxes so if you don't see it on the on the 1098 or whatever from then then you've got to collect other documentation for it because they have to have property taxes for crying out so if you sold your home in 2022 any real estate tax charged to the buyer should be shown on your settlement statement and in box six of any form 1099 s you received so this amount is considered a refund of real estate taxes see refunds and rebates later any real estate taxes you paid at closing should be shown on your settlements settlement detected statement so that's another kind of issue in terms of when you first purchase a home or when a home is first purchased you've got this issue in terms of the who's going to handle in the in the agreement the property taxes right so so so then and so it could be a little bit messy to determine and you might have to look through the closing statement to determine the proper allocation of payments related to to property taxes and who possibly could have a benefit for deduction related to it based on the agreement for the closing statement caution you must look at your real estate tax bill to decide if any deductible items charges such as those listed earlier are included in the bill so if your tax and authority or lender doesn't furnish you a copy of your real estate tax bill ask for it so prepayments of next year's property taxes only taxes paid in 2022 and assessed prior to 2023 can be deducted for 2022 so notice we're kind of have a cashed based system here for the most part and cashed based systems are actually more manipulable than accrual based systems but they're easier to track so if you have the cash flow you might say hey look I earned more money this year than I'm gonna earn next year for whatever reason if that were the case why don't I just prepay a bunch of these expenses why don't I just pay for my property taxes for the next 10 years this year because I happen to earn a lot of money this year or something and the government doesn't want you to let you do that so they're gonna they're gonna limit you know the amount of prepayment of the property taxes so if you get a bright idea of I'm gonna prepay stuff then you got to make sure and say am I able to prepay this or if the tax code gonna explicitly say which they often do no we're not gonna let you prepay a massive amount of your expenses because it's manipulative of the of the cutoff and whatnot so state or local law determines whether and when a property taxes assessed which is generally when the taxpayer becomes liable for the property tax imposed so refunds and rebates if you received a refund or rebate in 2022 of real estate taxes you paid in 2022 reduce your deduction by the amount of the refund or rebate if you received a refund or rebate in 2022 of real estate taxes you paid in an earlier year don't reduce your deduction by this amount instead you must include the refund or rebate in income on schedule one form 1040 line 8c if you deducted the real estate taxes in the earlier year and the deduction reduced your tax so this is the same kind of concept we saw before with this would like a the state tax refund for example if you got a benefit last year for something that you deducted and then they refunded it this year then what are you gonna do you're gonna go back to last year and fix the fact that you deducted something that you didn't really pay for because they refunded it to you or it would be easier and oftentimes the way to go the way that the code lets you go is to do it this year meaning if I got a benefit for it last year I'm gonna include it in income this year so it has a tax burden to me this year because I included it in income because I got a tax benefit it from it last year kind of improperly because I got I got a deduction which I didn't really shouldn't really have gotten because I didn't really pay that but that's the cash base kind of problem again with this cash based system because I paid it but then I got refund okay so see recovery is in publication 525 for details on how to figure the amount to include an income so line 5c state and local personal property taxes enter online 5c the state and local personal property taxes you paid but only if the taxes were based on the value alone and were opposed on a yearly basis example you paid a yearly fee for the registration of your car part of the fee was based on the car's value and part was based on the weight so now you've got your other property taxes other you know that you have the real estate taxes your home and another property like your car which is the common example where you have this registration fee so you may be able to deduct that but they want only to deduct the part of it