Itemized deductions
Moderator: Mark T Serbinski CA CPA
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Itemized deductions
Pardon the apparent stupidity of this question, but I have been reading opposite things in different places. When deducting your state/local taxes in the itemized deductions, are the taxes for the current tax year or for the past year. e.g. when filing this year, should I include the state taxes withheld by my employer during the 2004 calendar year, or should it be the taxes I paid in 2004 for the 2003 tax year? Thanks.
The local and state taxes that you actually PAID in 2004 (jan 1 to Dec 31), regardless of what year you paid them for, is eligible for fed deduction. This would include any withholding,any estimated payments you made, and could also include any taxes (not interest) you paid for previous years taxes.
If you owe state tax at the end of the year and pay it on your return, you include that on the following year's fed tax return.
If you overpaid your state tax during the year, you include the whole amount that you paid, and then next year, you will report the refund as income.
<i>nelsona non grata... and non pro</i>
If you owe state tax at the end of the year and pay it on your return, you include that on the following year's fed tax return.
If you overpaid your state tax during the year, you include the whole amount that you paid, and then next year, you will report the refund as income.
<i>nelsona non grata... and non pro</i>