Question

Excess Real Estate Taxes - How do these benefit me short term / long term?

Forum|Forum|6 years ago
April 20, 2020
1 reply
0 views

TO BE CLEAR: I know what this is, I just dont know how it benefits me short term / long term.

I have a business - Schedule C.
My wife has unreimbursed employee expenses Form 2106.

We live in CA, so we cap out our 10k max taxes (income/real estate) deduction quickly.

The question I have is:

1) On form 8829- how does inputting the EXCESS real estate taxes help me?

I tried putting in 7k as excess real estate taxes, which was the right number, and it DIDNT change anything for me. I was still getting the standard deduction of 24k for MFJ. I couldnt see a carryover anywhere.

2) on Form 8829 - I tried inputting 200k as excess real estate taxes (just to see what would happen)! and again, I was still getting the standard deduction of 24k for MFJ. No changes that i could see.

SO is there some benefit of this "EXCESS REAL ESTATE TAXES" How does it help? I cant seem to identify any benefit short term or long term?

When does it actually benefit?

A

AmeliesUncle

The Form 8829 is for your business Home Office, right? If so, that has nothing to do with the Standard Deduction. That is a business expense on Schedule C.

If the Form 8829 expenses are not allowed to be used for your Schedule C business (limited by Line 8), you can see the carryover on the bottom two lines of Form 8829.