Taxpayers who itemize deductions on their federal income tax returns can deduct state and local real estate and personal property taxes, as well as either income taxes or general sales taxes. State and local taxes have been deductible since the inception of the federal income tax in 1913.

Are state taxes deductible if you don’t itemize?

Even if you don’t itemize, you may be able to take above-the-line deductions. Itemized deductions include many of the most popular tax deductions such as home mortgage interest, medical expenses, charitable contributions, and state and local taxes.

Can you deduct both state income tax and sales tax?

If you itemize deductions, both of you must take either the state income tax deduction or the sales tax deduction. The tax law doesn’t allow you to mix-and-match. Voice your opinion! This site requires you to login or register to post a comment.

Is the state and local tax deduction added back to your taxable income?

State and local income tax deductions are added back to your taxable income when calculating the AMT. State and local income taxes are deductible when you’re calculating your regular federal income tax, but they’re not deductible when you’re calculating the AMT.

Can you deduct state and local taxes if you are married?

However, married taxpayers who file separate returns can only deduct state and local income taxes paid by them personally. “If you and your spouse file separate state, local and federal income tax returns, you each can deduct on your federal return only the amount of your own state and local income tax that you paid during the tax year.”.

How to compute optional standard deductions ( OSD )?

Deduction of cost of sales/service in arriving the tax base. Applying the above figures, OSD for INDIVIDUAL will now be as follows: Gross sales/receipts P220,000