Things You'll Need:
- Previous year state and local tax returns
- Property tax receipt(s)
- Receipts from large purchases (ie. car, boat, etc.)
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Step 1
Before determining whether it is best to write off taxes you have already paid, you need to know your filing status (ie. single, married filing jointly, head of household, etc.) and standard deduction amount. For 2008 returns, the standard deduction amounts are shown in the left column of form 1040 next to line 40.
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Step 2
It is only beneficial to write off your taxes if your total itemized tax amount is greater than your standard deduction amount. There are a number of items which can be deducted when you itemize, but you need to have receipts for documentation.
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Step 3
To see what is eligible for an itemized deduction, refer to Schedule A of Form 1040. In terms of taxes that you have already paid, real estate taxes, personal property taxes, and state and local income taxes or state and local sales taxes are eligible for itemized deductions.
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Step 4
Once you have completed Schedule A and have a total amount for your itemized deductions, you will want to compare this to your standard deduction amount that you found in Step 1. You can use either your standard deduction or your itemized deduction, but not both. In order to owe less tax overall, you will want to choose the greater of the two, since this number is subtracted from your income.
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Step 5
As always, if you have any questions about the best course of action for your situation or general questions about what is eligible for a deduction, be sure to consult a tax professional.
Comments
jenng said
on 4/29/2009 Great article on how to write off taxes 5*
gahazeleyes said
on 4/25/2009 Very good article. Thanks