Deductions for Taxes
You may deduct payments of state, local, and foreign income taxes, real property taxes, and personal property taxes if you itemize your personal deductions on Schedule A. You can opt to deduct state and local sales taxes instead of deducting state and local income taxes.
Not all taxes are deductible. Examples of nondeductible taxes include:
- Federal income taxes.
- Social Security and Medicare (FICA) taxes paid on wages.
- Sales taxes paid to acquire property for a business you operate. Instead, sales taxes are added to the property's tax basis.
Taxes claimed as itemized deductions are subject to reduction if you are a "high-income" taxpayer.
