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Subject:  Completed payment of 1998 Federal Taxes in 2000 Date:  4/15/2001  3:06 AM
Author:  tinmary Number:  50272 of 127637


I owed a lot ($9,000+) for my 1998 Federal Taxes, so I opted to pay it off over the course of the year in monthly installments. I set up a montly installment plan with the IRS. I paid the bulk of it in 1999 but the last few installments spilled over into the beginning of 2000.

I shouldn't be taxed on the income that I earned in 2000 that I used to pay off federal taxes owed for 1998, right? This amount should just be deducted from my 2000 taxable income, right?

If this is the case, where do I report the amount I paid so that it properly deducts itself from my 2000 taxable income?

Thanks for any shared wisdom.
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