What taxes did you pay?

    Published: 06-16-2009
    Views: 11,049
    Goodman & Company Tax Director Art Auerbach explains how to deduct state and local income tax.

    Host: What taxes did you pay?

    Arthur Auerbach: Taxes are deduction on Schedule A. You get a choice of deducting your State and local income tax. So if you recall, when we talked about or if watched the module on W2, there is a box on the bottom of the W2 state taxes withheld or any estimated taxes, payments that you made to the state, all of that's deductible. Supposing, you live in a state that doesn't have the state income tax, you can deduct your sales tax that you pay instead. Now you can go to the IRS table to determine sales tax which is based on your income or you can keep a closet full of receipts, add them all up every time you paid sales tax and put that number in on your 1040 for the sales tax deduction. You get the deduction on Schedule A for your Real Estate taxes for your home, for your personal asset and then there is a thing called personal property taxes. So if you have come from a jurisdiction that pays where you pay your personal property tax let's say for automobiles or boats or Aeroplanes, then that can be deduction too on Schedule A.

    Any Federal taxes or Federal excise taxes are generally not deductible.