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<< For the first time in my life, I actually owed IRS money in April 1999 for tax year 1998. I was wondering, if, for example, I owed $2000 in taxes for 1998, could I deduct that $2000 from my 1999 income? My reasoning is, I used 1999 money to pay 1998 taxes, so why would I get taxed again on the $2000 that the IRS already has? >>

Ignore the previous response--it's wrong.

Federal taxes are not deductible on your Federal return. You paid a lot more than $2,000 in 1998 taxes. There's nothing different between the nondeductible $2,000 check you wrote and the withheld taxes that they kept.

Phil Marti
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