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Category: Finding Deductions

Overview of Deductions for Taxes You Paid

There are four types of nonbusiness taxes that the IRS will allow you to deduct if you are itemizing your deductions.  These include:

  • State, local, and foreign income taxes
  • Real estate taxes
  • Personal property taxes,
  • State and local sales taxes

To be deductible, the tax must be imposed on you and must have been paid during your tax year.  Taxes may be claimed only as an itemized deduction on Form 1040, Schedule A.

Any taxes that qualify for a deduction can be entered within the TaxSlayer program under Deductions > Itemized Deductions > Taxes You Paid.

Taxes you CANNOT deduct on Schedule A:

  • Federal income taxes
  • Social Security taxes
  • Stamp taxes, or transfer taxes on the sale of property
  • Homeowner's association fees
  • Estate and inheritance taxes 
  • Service charges for water, sewer, or trash collection.

If you did pay any qualifying, deductible taxes during the tax year, you can enter these under:  Deductions > Itemized Deductions > Taxes You Paid.

For more information see IRS Tax Topic 503