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| *Ostroff, Fair and Company>>>United States Taxes |
State income tax deduction? |
i wanted to know if i could use taxes i paid last year w2's which total 5000 on the state to reduce my federal that i owe about 3000> is this possible....neeed advice If you choose to itemize deductions rather than the standard deductions, you will be able to claim the taxes you paid in the year. go to the IRS website for info or call them or get an accountant to advise you and help you thats their job to assist you in that field You'll have to get your refund from the state first and then use that money to pay the IRS. Is "last year" 2006? Are the amounts your refer to withholding of state income taxes? If on your 2005 State tax return you owed $5000, and you paid that amount in 2006, then you can deduct that balance due paid on Schedule A under taxes. If on your 2006 W-2 there is withholding for the state, those amounts also go on the Schedule A. As long as the total deductions on Schedule A are more than your standard deduction, you will benefit from these deductions. You can only deduct the payments or withholding of your state and local income tax if you itimized deductions (file a Schedule A). If you have more itemized deductions than whatever your standard deduction is, then sure, you can itemize, and deduct state and local (not federal) income taxes paid. But you don't get to take both, so you wouldn't do that if your total itemized deductions is less than the standard deduction. |
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