There are four types of non-business taxes the IRS will allow you to deduct if you are itemizing your deductions. These include:
- State, local, and foreign income taxes,
- Real estate taxes,
- Personal property taxes (Ad Valorem tax), and
- State and local sales taxes (NOTE: Your deduction of state and local income, sales, and property taxes is limited to a combined total deduction of $10,000 ($5,000 if married filing separately). You may be subject to a limit on some of your other itemized deductions, also.)
To be deductible, the tax must be imposed on you and must have been paid during your tax year. Taxes may be claimed only as an itemized deduction on Form 1040 Schedule A.
What taxes CANNOT be deducted on a Schedule A?
- Federal income taxes
- Social Security taxes, Medicare
- Stamp taxes or transfer taxes on the sale of property
- Homeowners association fees
- Estate and inheritance taxes
- Service charges for water, sewer, or trash collection.
How do I enter my qualifying taxes for a deduction?
If you did pay any qualifying, deductible taxes during the tax year, you can enter these within your account under:
- Federal Section
- Select My Forms
- Itemized Deductions
- Taxes You Paid
For more information see IRS Tax Topic 503