TaxConnections Blog Post - Chris Wittich about Property Taxes“P” is for property taxes.  In the May tax bill passed by the MN legislature, the property taxes were part of the bill.  Income taxes went up 2% on the taxpayers with more than $250K of taxable income, but the property taxes went down for all homeowners.  This brought the total tax bill down closer to 1/3 each for property, sales, and income taxes.  Depending on your spending habits, that 1/3 breakdown might not be true, but that was part of the Governor’s intention with the May tax bill.

Property taxes are deductible on the federal return for taxpayers that itemize their deductions.  That doesn’t do much good for people who rent, but the tax playing field is tilted toward home ownership with the taxes and interest being deductible for homeowners while nothing is deductible for renters.

Property tax refunds can be claimed in MN for homeowners with household income of less than roughly $100K and for renters with household income less than roughly $35K.  The items of household income include non-taxable Social Security, non-taxable scholarships, other tax free payments and the income of any other individuals residing in the home.  The tax bill also changed the formulas which calculate the M1PR refunds.  The bill increased the likelihood that a refund will be available and for many taxpayers it increased their maximum M1PR refund amount.

Taxes A to Z – still randomly meandering through tax topics, but at least for 26 posts in an alphabetical order.

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