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posted: Mar. 25, 2009 @ 10:19a
tazzy531
Senior Member - 4K
posted: Mar. 25, 2009 @ 10:59a
Wid3load said: I have a question about deductions.... I didn't know state taxes qualify under your deductions? Can someone explain to me how that works?
How it works: State tax is deductible. You deduct your state taxes paid from your federal income.
Wid3load said: I have a question about deductions.... I didn't know state taxes qualify under your deductions? Can someone explain to me how that works?
I made some donations and I guess the state taxes pushed me over the regular deductions to qualify for itemized deductions.It's rare for taxpayers to justify be able to itemizing unless they pay mortgage interest and property tax, but it certainly can happen.
The standard deductions are:
Single: $5,450 Head of Household: $8,000 Married Filing Joint: $10,900 Married Filing Separately: $5,450 Qualifying Widow/Widower: $10,900
If it would benefit you to itemize, you'd do so using Schedule A.
If you itemize, you have the choice between deducting either sales tax or state income tax but not both. Sometimes people who have made large purchases (car, truck, etc.) may find that deducting sales tax is the way to go. Also, people who live in states without state income tax would deduct sales tax.
How are you doing your tax return this year - by pen/paper, software, online service, friend/family member, or paid preparer? If you're using software or an online service, the system should be able to step you through itemizing.
tazzy531
Senior Member - 4K
posted: Mar. 25, 2009 @ 5:12p
Xnarg said: It's rare for taxpayers to justify be able to itemizing unless they pay mortgage interest and property tax, but it certainly can happen.
Not rare if you live in a high state tax income state.
Xnarg said: Wid3load said: I have a question about deductions.... I didn't know state taxes qualify under your deductions? Can someone explain to me how that works?
I made some donations and I guess the state taxes pushed me over the regular deductions to qualify for itemized deductions.It's rare for taxpayers to justify be able to itemizing unless they pay mortgage interest and property tax, but it certainly can happen.
The standard deductions are:
Single: $5,450 Head of Household: $8,000 Married Filing Joint: $10,900 Married Filing Separately: $5,450 Qualifying Widow/Widower: $10,900
If it would benefit you to itemize, you'd do so using Schedule A.
If you itemize, you have the choice between deducting either sales tax or state income tax but not both. Sometimes people who have made large purchases (car, truck, etc.) may find that deducting sales tax is the way to go. Also, people who live in states without state income tax would deduct sales tax.
How are you doing your tax return this year - by pen/paper, software, online service, friend/family member, or paid preparer? If you're using software or an online service, the system should be able to step you through itemizing.
I did it throught TaxCut... I ended up having itemized because of donations. I initially thought my donations would not cause it to go to itemized but I didn't know you include state taxes in your calculations. I believe TaxCut filled out a schedule A for me?? I should ok right?
tazzy531 said: Xnarg said: It's rare for taxpayers to justify be able to itemizing unless they pay mortgage interest and property tax, but it certainly can happen.
Not rare if you live in a high state tax income state.
Or work in Philly where the local wage tax is over 4% combined with 3.27% state tax.
Xnarg
Senior Member - 5K
posted: Mar. 26, 2009 @ 8:43a
Wid3load said: ...I did it throught TaxCut... I ended up having itemized because of donations. I initially thought my donations would not cause it to go to itemized but I didn't know you include state taxes in your calculations. I believe TaxCut filled out a schedule A for me?? I should ok right?If you followed the directions in TaxCut_ you should be OK. Just make sure you have have the receipts for the donations, if they're required - that should be spelled out in the TC instructions.
Xnarg
Senior Member - 5K
posted: Mar. 26, 2009 @ 8:45a
dawndelion said: tazzy531 said: Xnarg said: It's rare for taxpayers to justify be able to itemizing unless they pay mortgage interest and property tax, but it certainly can happen. Not rare if you live in a high state tax income state.Or work in Philly where the local wage tax is over 4% combined with 3.27% state tax.IL is getting ready to increase their state income tax rate by 50%.
Xnarg said: Wid3load said: ...I did it throught TaxCut... I ended up having itemized because of donations. I initially thought my donations would not cause it to go to itemized but I didn't know you include state taxes in your calculations. I believe TaxCut filled out a schedule A for me?? I should ok right?If you followed the directions in TaxCut_ you should be OK. Just make sure you have have the receipts for the donations, if they're required - that should be spelled out in the TC instructions.
yeah i have receipts for all the donations.. hopefully ill be ok
jhburgess
Senior Member
posted: Mar. 26, 2009 @ 10:05a
titan01 said: Xnarg said: Wid3load said: I have a question about deductions.... I didn't know state taxes qualify under your deductions? Can someone explain to me how that works?
I made some donations and I guess the state taxes pushed me over the regular deductions to qualify for itemized deductions.It's rare for taxpayers to justify be able to itemizing unless they pay mortgage interest and property tax, but it certainly can happen.
The standard deductions are:
Single: $5,450 Head of Household: $8,000 Married Filing Joint: $10,900 Married Filing Separately: $5,450 Qualifying Widow/Widower: $10,900
If it would benefit you to itemize, you'd do so using Schedule A.
If you itemize, you have the choice between deducting either sales tax or state income tax but not both. Sometimes people who have made large purchases (car, truck, etc.) may find that deducting sales tax is the way to go. Also, people who live in states without state income tax would deduct sales tax.
How are you doing your tax return this year - by pen/paper, software, online service, friend/family member, or paid preparer? If you're using software or an online service, the system should be able to step you through itemizing.
I did it throught TaxCut... I ended up having itemized because of donations. I initially thought my donations would not cause it to go to itemized but I didn't know you include state taxes in your calculations. I believe TaxCut filled out a schedule A for me?? I should ok right?
If you live in a state with local sales taxes in addition to the state tax, be sure to include the local tax percentage in the TaxCut computations as the IRS tables and TC tables are based on the state rate. For example where I live, the state tax is 4%, but the county adds another 2.5% and the city another 3.5% for a total of 10%. In many cases, the sales tax deduction may be larger than the state income tax deduction when all the local taxes (plus taxes on big-ticket items) are included.
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