State and local income taxes or general sales tax. You can choose whichever gives you the most benefit.
Real estate taxes. Deductions include taxes you pay on your home or
other real property you own (including property owned in a foreign country). Remember
to check closing statements when you buy or sell property. You can claim the
portion of current real estate taxes you're responsible for. However, if you
agree to pay delinquent taxes the seller owed at the time of closing, that
expense is considered part of your basis in the property.
Personal property taxes. These taxes are imposed annually on the
value of property other than real estate. Certain motor vehicle registration
fees fit this description.
Foreign income taxes. Caution: Instead of deducting these taxes,
you have the option of taking a credit, which will reduce your tax bill dollar-for-dollar
and may offer more benefit.
Federal estate tax. If you inherit certain assets and are required
to report the income from those assets on your personal return, you may be able
to deduct a portion of the federal estate tax paid.
Some taxes, such as
self-employment taxes, are deductible elsewhere on your return. Other taxes are
not deductible at all. Examples include marriage licenses, gift taxes, and Medicare
taxes (including the 3.8% net investment income tax). Feel free to contact us
at (518) 798-3330 if you have questions about the deductibility of a tax you paid during the
year, or if you received a refund of a tax you deducted in a prior year. We're
here to help.
