Category: Finding Deductions
Description of Additional Taxes that You May Have Paid
Federal Estimated Payments:
Federal estimated payments are generally payments that you make to the IRS either because:
- You are self-employed; OR
- You owed the IRS on your tax return last year.
You would have had to personally mail these payments to the IRS in quarterly installments throughout the year. Most people do not make estimated payments because their employers withhold federal taxes for them automatically.
State Estimated Payments:
You can also make estimated payments to your state. Again, this is not extremely common because most people have their employers withhold taxes automatically from their salaries or wages.
Other Federal withholdings:
If you had any additional tax withholding that you have not already reported, please make sure they are reported so can accurate return is filed. Generally, you would only report Other Federal Withholdings if you have an amount listed on one of the following forms:
- Form 1099-B, Box 4
- Form 1099-MISC, Box 4
Other State withholdings:
If you had any additional tax withholding to a state that you have not already entered, please make sure this is also reported to ensure an accurate state return is filed. This is also not very common.
To report these withholdings or estimated payments, please log into your TaxSlayer account and select Federal Section > Payments and Estimates.
On your return, you can take either a deduction for state and local income taxes, or you can take a deduction for state and local sales taxes. *In most cases, it is most beneficial to take the deduction for the income taxes instead of the sales tax.
We will automatically figure the amount of your income tax deduction based on information you have already entered. Generally, you would only want to take the sales tax deduction if you made a "big" purchase (such as a car, mobile home, etc.) during the year that would have required you to pay a large amount of sales tax.
To report your sales tax, please log into your TaxSlayer account and select Federal Section > Deductions > Enter Myself > Itemized Deductions > Taxes You Paid > Sales Tax Worksheet.
Foreign Taxes Paid:
If you paid taxes to a foreign country, in most cases you can use these as an additional deduction. You can deduct up to $300, or $600 if Married Filing Joint, of foreign taxes paid if you meet the following four tests:
- The tax must be imposed on you
- You must have paid or accrued the tax
- The tax must be the legal and actual foreign tax liability
- The tax must be an income tax (or a tax in lieu of an income tax)
To claim the Foreign Tax Credit, please log into your TaxSlayer account and select Federal Section > Deductions > Enter Myself > Credits > Foreign Tax Credit.
Prior Year 4th Quarter Estimate Payment:
Sometimes, estimated payments are made after the end of the tax year. These are a deduction on your return for the year in which they were paid.
Amount Paid with Extension:
Have you filed an extension to get more time to complete your return? If so, any payment that you have already sent in can be used to help reduce your tax bill and increase your refund.