Tax Deductions on Taxes Paid
Most taxpayers don't know that even taxes they pay may be tax deductible. There are rules to follow to determine if the taxes paid are tax deductible.
Tests for eligibility for tax deduction of taxes paid
In order to deduct any taxes paid,
When are taxes paid not deductible?
Taxpayers cannot deduct:
- taxes they do not owe but pay for someone else
- taxes they owe but someone else pays
- taxes that were not paid in that tax year
Taxes paid that may be eligible for tax deductions
State and local income or general sales taxes
Real Estate tax
Personal property tax
Which taxes are nondeductible taxes?
- federal taxes (income tax, social security or FICA, Medicare, railroad retirement tax, gift tax)
- Hunting licenses and dog licenses
- Water and sewer taxes
- Taxes on alcoholic beverages, cigarettes, tobacco
- State, local, and federal taxes on gasoline, diesel, other motor fuels used in nonbusiness vehicle
- Utility taxes such as telephone, gas and electricity