Submitted By: someone
Answered: July 22, 2018 10:43 pm

I’m confused about what state estimated taxes I can deduct on my federal return?

State estimated taxes are deducted as itemized deductions for the year in which they are paid. For example, 2017 state estimated income taxes paid on April 18, 2017, June 15, 2017, and September 15, 2017, are deducted on the 2017 federal income tax return. The final installment of 2017 state estimated income taxes paid on January 16, 2018, are deductible on the 2018 federal income tax return (subject to the new $10,000 cap on deductible state and local taxes). However, the final estimated tax payment for 2016 that was made in January 2017 is part of the 2017 itemized deduction for state and local income taxes.

Tax Glossary

Fair market value

What a willing buyer would pay to a willing seller when neither is under any compulsion to buy or sell.

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