Tax Deductible Taxes | Taxes, Income, State, Local, Tax | Tax Services: Get tax help from a local tax accountant, or cpa, tax attorney, or enrolled agent.

Tax Deductible Taxes

You pay many taxes to federal, state and local governments and some of them are deductible as part of your itemized deduction. The deductible taxes are:

State and Local Income Taxes.

The state and local taxes are withhold as part of payroll taxes by your employer and will appear in your w-2 form. If you paid any estimated taxes to the state or to the local governments during the current year you included that in your Schedule A&B itemized deduction.

Real Estate Taxes.

Real estate taxes are property taxes paid to your local government on real property you own like house, land, etc. based on its assessed value.

Personal Property Taxes

The personal property taxes are those taxes you pay based on the value of a personal property such as a boat or car you own and paid to local government in the current year.

Sales Taxes.

You can claim state and local sales taxes provided you are not claiming state income taxes. If you live in a state without income taxes, then you can deduct sales taxes. Those who pay state and local income taxes can claim either state income taxes or sales taxes, which ever is higher in their 1040 schedule A&B itemized deduction. The deductible sales tax amount for each state is available in the 1040 Schedule A&B Instructions.

Foreign Income Taxes

You can take either take a tax deduction for the taxes your paid to a foreign government or could take a tax credit for the same if your foreign income is subjected to U.S. taxes as well. It may be advantageous to claim the tax credit as it will reduce the tax liability dollar to dollar. A tax deduction only reduces your taxable income and you less tax on the reduced taxable income.