This year I paid a LARGE sum of money to settle a state tax debt for controlled substance tax. Is there any way to deduct that payment to the Department of Revenue on my income taxes?
How large is large? State taxes can be deductible if you itemize your deductions on your federal return. If the total amount of state taxes you paid during the year plus all your other itemized deductions (donations to charity, mortgage interest for your primary home, are some examples) is more than the standard deduction, then you should itemize your deductions and you can make use of the transaction. Check the irs website for the standard deduction tables…. believe it’s around $5,500 for individuals.
on Jul 23rd, 2009 at 9:56 am
No. This is a tax on pot (or something similar). It is not an income tax or any kind of tax that you can take a deduction for.
References :
on Jul 23rd, 2009 at 10:13 am
How large is large? State taxes can be deductible if you itemize your deductions on your federal return. If the total amount of state taxes you paid during the year plus all your other itemized deductions (donations to charity, mortgage interest for your primary home, are some examples) is more than the standard deduction, then you should itemize your deductions and you can make use of the transaction. Check the irs website for the standard deduction tables…. believe it’s around $5,500 for individuals.
References :