Thursday, November 6, 2008

Tax Deductible Taxes

Taxpayers are often confused about the deductibility of taxes. What can be deducted and what can’t are some of the questions frequently asked. Generally the following taxes are considered deductible under current tax laws:
State and local income taxes or general sales tax (but not both)
Occupational taxes
Taxes on income producing property
Tenant’s share of real estate taxes paid by co-ops
Foreign real estate taxes
Taxes that are expenses of business or producing income
State or local real estate taxes
Employee contribution to state disability fund or state unemployment fund
State income tax
Foreign income taxes
State or local personal property taxes that is:
1. Charged on personal property,
2. Based only on the value of the personal property, and
3. Charged on a yearly basis, even if collected more or less than once a year.
Hopefully this list will help make the determination as to the best action to take when considering listing a specific tax as a deduction. Taxpayers are encouraged to take full advantage of every provision in the tax code to ensure they do not overpay their tax obligation.

No comments: