8 Things to Know About Divorce and Taxes
If you’re filing for divorce, or find yourself recently divorced, it’s imperative that you understand how your changing marital status...
State taxes are certainly deductible on your personal tax return, however, if you are not itemizing your deductions, the state tax deduction will not impact your return. Deductible taxes include state and local income tax or sales tax, property tax paid during, and any other mandatory tax charged by the state or locality during the year.
It’s important to note that you have the option of deducting the larger of State income taxes (taxes paid with the year end state return as well as estimated taxes paid during the year) or state sales taxes. The state sales tax deduction is usually worth considering if you bought a car or made another major purchase during the tax year, or if you live in a state with a high sales tax rate.
Also worth mentioning, if you deduct your state income taxes as an itemized deduction, and a refund is received in a later year, the refund will have to be reported as income on your tax return.
Get the latest posts delivered right to your inbox