Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: Skwire One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121451  
Subject: Re: State and Local Income Taxes Date: 2/12/2000 7:43 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Only State and Local Income Taxes paid in 1999 for calendar year 1999 are deductible on Schedule A of form 1040.

Sorry if I am misreading your point; I just wanted to add that State/Local taxes paid in 1999 for taxes due for prior years can be itemized on Sched. A as well.

Taxes paid in 2000 for calendar year 1999 are not deductible.

In 1999. They can be included in Sched. A in 2000, however.

If you know you are going to owe State and Local income taxes, and that you are going to itemize on your Federal 1040, it is in your interest to pay them in full before the end of calendar year 1999 so they can be deducted on your schedule A 1040 deductions.

It may be in your interest to accelerate the deduction (i.e., the value of (i) getting the deduction in 1999 but losing the use of the money until it would otherwise be due may exceed (ii) the benefit of using the money until it would otherwise be paid in 2000 coupled with the itemized deduction taken in 2000). The issue is one of the timing of the deduction and not whether you get to take one.

However refunds received in 1999 for calendar year 1998 are considered as income for 1999 and must be reported on Form 1040 itself.

This depends on whether you itemized in the corresponding year to which the refund relates as well as whether the reduction of the itemized deduction would take your itemized deductions below the standard deduction level or not (as well as some issues relating to the "tax benefit rule" which TMFTaxes has alluded to in recent posts).

Hope I am not restating or, worse, confusing the obvious.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Saul's Investing Discussions

Why Did I Buy a Bunch of PFIE Today?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement