Small business tax help website

Property Tax Deduction

Property tax deduction is critical for some small business owners especially if you have real estate investment property. Property tax deductions for rental property is also a key area. How to take property tax deduction of taxes levied on business property?

Are property taxes levied on business property deductible?

Fortunately yes. The Internal Revenue Service property tax deduction is available for individuals and small businesses. You can alternatively have any of the property taxes amortized. For more on property tax deduction rules, see IRS tax publication 334 and 535.

How to take property tax deduction?

On your IRS tax form, line 23 of Schedule C (IRS tax form 1040) or line 2 of Schedule C-EZ (IRS tax form 1040), you can take property tax deduction.

Property Tax Deduction

To make a property tax deduction, itemize it on the IRS form 1040. The standard property tax deduction is a fixed dollar amount that reduced the taxable income which is used to calculate how much taxes you owe the IRS.

Note that a property tax deduction for small business is claimed differently (on a different federal IRS tax form) from a property tax deduction for individuals.

You must use the right form to claim your property tax deduction if you are a small business and itemize correctly on Schedule C instead of Schedule A. Distinguish your property tax deduction if you are claiming a property tax deduction for real estate investment property or claiming tax deductions for rental property.