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2009 Federal Tax Form 1040

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2009 Federal Tax Form 1040

2009 federal tax form 1040 22. 2009 federal tax form 1040   Taxes Table of Contents IntroductionIndian tribal government. 2009 federal tax form 1040 Useful Items - You may want to see: Tests To Deduct Any Tax Income TaxesState and Local Income Taxes Foreign Income Taxes General Sales TaxesMotor vehicles. 2009 federal tax form 1040 Real Estate TaxesReal estate taxes for prior years. 2009 federal tax form 1040 Examples. 2009 federal tax form 1040 Form 1099-S. 2009 federal tax form 1040 Real Estate-Related Items You Cannot Deduct Personal Property Taxes Taxes and Fees You Cannot Deduct Where To Deduct Introduction This chapter discusses which taxes you can deduct if you itemize deductions on Schedule A (Form 1040). 2009 federal tax form 1040 It also explains which taxes you can deduct on other schedules or forms and which taxes you cannot deduct. 2009 federal tax form 1040 This chapter covers the following topics. 2009 federal tax form 1040 Income taxes (federal, state, local, and foreign). 2009 federal tax form 1040 General sales taxes (state and local). 2009 federal tax form 1040 Real estate taxes (state, local, and foreign). 2009 federal tax form 1040 Personal property taxes (state and local). 2009 federal tax form 1040 Taxes and fees you cannot deduct. 2009 federal tax form 1040 Use Table 22-1 as a guide to determine which taxes you can deduct. 2009 federal tax form 1040 The end of the chapter contains a section that explains which forms you use to deduct different types of taxes. 2009 federal tax form 1040 Business taxes. 2009 federal tax form 1040   You can deduct certain taxes only if they are ordinary and necessary expenses of your trade or business or of producing income. 2009 federal tax form 1040 For information on these taxes, see Publication 535, Business Expenses. 2009 federal tax form 1040 State or local taxes. 2009 federal tax form 1040   These are taxes imposed by the 50 states, U. 2009 federal tax form 1040 S. 2009 federal tax form 1040 possessions, or any of their political subdivisions (such as a county or city), or by the District of Columbia. 2009 federal tax form 1040 Indian tribal government. 2009 federal tax form 1040   An Indian tribal government recognized by the Secretary of the Treasury as performing substantial government functions will be treated as a state for purposes of claiming a deduction for taxes. 2009 federal tax form 1040 Income taxes, real estate taxes, and personal property taxes imposed by that Indian tribal government (or by any of its subdivisions that are treated as political subdivisions of a state) are deductible. 2009 federal tax form 1040 General sales taxes. 2009 federal tax form 1040   These are taxes imposed at one rate on retail sales of a broad range of classes of items. 2009 federal tax form 1040 Foreign taxes. 2009 federal tax form 1040   These are taxes imposed by a foreign country or any of its political subdivisions. 2009 federal tax form 1040 Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 530 Tax Information for Homeowners Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule E (Form 1040) Supplemental Income and Loss 1116 Foreign Tax Credit Tests To Deduct Any Tax The following two tests must be met for you to deduct any tax. 2009 federal tax form 1040 The tax must be imposed on you. 2009 federal tax form 1040 You must pay the tax during your tax year. 2009 federal tax form 1040 The tax must be imposed on you. 2009 federal tax form 1040   In general, you can deduct only taxes imposed on you. 2009 federal tax form 1040   Generally, you can deduct property taxes only if you are an owner of the property. 2009 federal tax form 1040 If your spouse owns the property and pays the real estate taxes, the taxes are deductible on your spouse's separate return or on your joint return. 2009 federal tax form 1040 You must pay the tax during your tax year. 2009 federal tax form 1040   If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. 2009 federal tax form 1040 If you pay your taxes by check, the day you mail or deliver the check is the date of payment, provided the check is honored by the financial institution. 2009 federal tax form 1040 If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of payment. 2009 federal tax form 1040 If you contest a tax liability and are a cash basis taxpayer, you can deduct the tax only in the year you actually pay it (or transfer money or other property to provide for satisfaction of the contested liability). 2009 federal tax form 1040 See Publication 538, Accounting Periods and Methods, for details. 2009 federal tax form 1040    If you use an accrual method of accounting, see Publication 538 for more information. 2009 federal tax form 1040 Income Taxes This section discusses the deductibility of state and local income taxes (including employee contributions to state benefit funds) and foreign income taxes. 2009 federal tax form 1040 State and Local Income Taxes You can deduct state and local income taxes. 2009 federal tax form 1040 However, you can elect to deduct state and local general sales taxes instead of state and local income taxes. 2009 federal tax form 1040 See General Sales Taxes , later. 2009 federal tax form 1040 Exception. 2009 federal tax form 1040    You cannot deduct state and local income taxes you pay on income that is exempt from federal income tax, unless the exempt income is interest income. 2009 federal tax form 1040 For example, you cannot deduct the part of a state's income tax that is on a cost-of-living allowance exempt from federal income tax. 2009 federal tax form 1040 What To Deduct Your deduction may be for withheld taxes, estimated tax payments, or other tax payments as follows. 2009 federal tax form 1040 Withheld taxes. 2009 federal tax form 1040   You can deduct state and local income taxes withheld from your salary in the year they are withheld. 2009 federal tax form 1040 Your Form(s) W-2 will show these amounts. 2009 federal tax form 1040 Forms W-2G, 1099-G, 1099-R, and 1099-MISC may also show state and local income taxes withheld. 2009 federal tax form 1040 Estimated tax payments. 2009 federal tax form 1040   You can deduct estimated tax payments you made during the year to a state or local government. 2009 federal tax form 1040 However, you must have a reasonable basis for making the estimated tax payments. 2009 federal tax form 1040 Any estimated state or local tax payments that are not made in good faith at the time of payment are not deductible. 2009 federal tax form 1040 For example, you made an estimated state income tax payment. 2009 federal tax form 1040 However, the estimate of your state tax liability shows that you will get a refund of the full amount of your estimated payment. 2009 federal tax form 1040 You had no reasonable basis to believe you had any additional liability for state income taxes and you cannot deduct the estimated tax payment. 2009 federal tax form 1040 Refund applied to taxes. 2009 federal tax form 1040   You can deduct any part of a refund of prior-year state or local income taxes that you chose to have credited to your 2013 estimated state or local income taxes. 2009 federal tax form 1040    Do not reduce your deduction by either of the following items. 2009 federal tax form 1040 Any state or local income tax refund (or credit) you expect to receive for 2013. 2009 federal tax form 1040 Any refund of (or credit for) prior-year state and local income taxes you actually received in 2013. 2009 federal tax form 1040   However, part or all of this refund (or credit) may be taxable. 2009 federal tax form 1040 See Refund (or credit) of state or local income taxes , later. 2009 federal tax form 1040 Separate federal returns. 2009 federal tax form 1040   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. 2009 federal tax form 1040 Joint state and local returns. 2009 federal tax form 1040   If you and your spouse file joint state and local returns and separate federal returns, each of you can deduct on your separate federal return a part of the total state and local income taxes paid during the tax year. 2009 federal tax form 1040 You can deduct only the amount of the total taxes that is proportionate to your gross income compared to the combined gross income of you and your spouse. 2009 federal tax form 1040 However, you cannot deduct more than the amount you actually paid during the year. 2009 federal tax form 1040 You can avoid this calculation if you and your spouse are jointly and individually liable for the full amount of the state and local income taxes. 2009 federal tax form 1040 If so, you and your spouse can deduct on your separate federal returns the amount you each actually paid. 2009 federal tax form 1040 Joint federal return. 2009 federal tax form 1040   If you file a joint federal return, you can deduct the total of the state and local income taxes both of you paid. 2009 federal tax form 1040 Contributions to state benefit funds. 2009 federal tax form 1040    As an employee, you can deduct mandatory contributions to state benefit funds withheld from your wages that provide protection against loss of wages. 2009 federal tax form 1040 For example, certain states require employees to make contributions to state funds providing disability or unemployment insurance benefits. 2009 federal tax form 1040 Mandatory payments made to the following state benefit funds are deductible as state income taxes on Schedule A (Form 1040), line 5. 2009 federal tax form 1040 Alaska Unemployment Compensation Fund. 2009 federal tax form 1040 California Nonoccupational Disability Benefit Fund. 2009 federal tax form 1040 New Jersey Nonoccupational Disability Benefit Fund. 2009 federal tax form 1040 New Jersey Unemployment Compensation Fund. 2009 federal tax form 1040 New York Nonoccupational Disability Benefit Fund. 2009 federal tax form 1040 Pennsylvania Unemployment Compensation Fund. 2009 federal tax form 1040 Rhode Island Temporary Disability Benefit Fund. 2009 federal tax form 1040 Washington State Supplemental Workmen's Compensation Fund. 2009 federal tax form 1040    Employee contributions to private or voluntary disability plans are not deductible. 2009 federal tax form 1040 Refund (or credit) of state or local income taxes. 2009 federal tax form 1040   If you receive a refund of (or credit for) state or local income taxes in a year after the year in which you paid them, you may have to include the refund in income on Form 1040, line 10, in the year you receive it. 2009 federal tax form 1040 This includes refunds resulting from taxes that were overwithheld, applied from a prior year return, not figured correctly, or figured again because of an amended return. 2009 federal tax form 1040 If you did not itemize your deductions in the previous year, do not include the refund in income. 2009 federal tax form 1040 If you deducted the taxes in the previous year, include all or part of the refund on Form 1040, line 10, in the year you receive the refund. 2009 federal tax form 1040 For a discussion of how much to include, see Recoveries in chapter 12. 2009 federal tax form 1040 Foreign Income Taxes Generally, you can take either a deduction or a credit for income taxes imposed on you by a foreign country or a U. 2009 federal tax form 1040 S. 2009 federal tax form 1040 possession. 2009 federal tax form 1040 However, you cannot take a deduction or credit for foreign income taxes paid on income that is exempt from U. 2009 federal tax form 1040 S. 2009 federal tax form 1040 tax under the foreign earned income exclusion or the foreign housing exclusion. 2009 federal tax form 1040 For information on these exclusions, see Publication 54, Tax Guide for U. 2009 federal tax form 1040 S. 2009 federal tax form 1040 Citizens and Resident Aliens Abroad. 2009 federal tax form 1040 For information on the foreign tax credit, see Publication 514. 2009 federal tax form 1040 General Sales Taxes You can elect to deduct state and local general sales taxes, instead of state and local income taxes, as an itemized deduction on Schedule A (Form 1040), line 5b. 2009 federal tax form 1040 You can use either your actual expenses or the state and local sales tax tables to figure your sales tax deduction. 2009 federal tax form 1040 Actual expenses. 2009 federal tax form 1040   Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) if the tax rate was the same as the general sales tax rate. 2009 federal tax form 1040 However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. 2009 federal tax form 1040 If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. 2009 federal tax form 1040 If you use the actual expenses method, you must have receipts to show the general sales taxes paid. 2009 federal tax form 1040 Do not include sales taxes paid on items used in your trade or business. 2009 federal tax form 1040 Motor vehicles. 2009 federal tax form 1040   For purposes of this section, motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. 2009 federal tax form 1040 This also includes sales taxes on a leased motor vehicle, but not on vehicles used in your trade or business. 2009 federal tax form 1040 Optional sales tax tables. 2009 federal tax form 1040   Instead of using your actual expenses, you can figure your state and local general sales tax deduction using the state and local sales tax tables in the Instructions for Schedule A (Form 1040). 2009 federal tax form 1040 You may also be able to add the state and local general sales taxes paid on certain specified items. 2009 federal tax form 1040   Your applicable table amount is based on the state where you live, your income, and the number of exemptions claimed on your tax return. 2009 federal tax form 1040 Your income is your adjusted gross income plus any nontaxable items such as the following. 2009 federal tax form 1040 Tax-exempt interest. 2009 federal tax form 1040 Veterans' benefits. 2009 federal tax form 1040 Nontaxable combat pay. 2009 federal tax form 1040 Workers' compensation. 2009 federal tax form 1040 Nontaxable part of social security and railroad retirement benefits. 2009 federal tax form 1040 Nontaxable part of IRA, pension, or annuity distributions, excluding rollovers. 2009 federal tax form 1040 Public assistance payments. 2009 federal tax form 1040 If you lived in different states during the same tax year, you must prorate your applicable table amount for each state based on the days you lived in each state. 2009 federal tax form 1040 See the Instructions for Schedule A (Form 1040), line 5, for details. 2009 federal tax form 1040 Real Estate Taxes Deductible real estate taxes are any state, local, or foreign taxes on real property levied for the general public welfare. 2009 federal tax form 1040 You can deduct these taxes only if they are based on the assessed value of the real property and charged uniformly against all property under the jurisdiction of the taxing authority. 2009 federal tax form 1040 Deductible real estate taxes generally do not include taxes charged for local benefits and improvements that increase the value of the property. 2009 federal tax form 1040 They also do not include itemized charges for services (such as trash collection) assessed against specific property or certain people, even if the charge is paid to the taxing authority. 2009 federal tax form 1040 For more information about taxes and charges that are not deductible, see Real Estate-Related Items You Cannot Deduct , later. 2009 federal tax form 1040 Tenant-shareholders in a cooperative housing corporation. 2009 federal tax form 1040   Generally, if you are a tenant-stockholder in a cooperative housing corporation, you can deduct the amount paid to the corporation that represents your share of the real estate taxes the corporation paid or incurred for your dwelling unit. 2009 federal tax form 1040 The corporation should provide you with a statement showing your share of the taxes. 2009 federal tax form 1040 For more information, see Special Rules for Cooperatives in Publication 530. 2009 federal tax form 1040 Division of real estate taxes between buyers and sellers. 2009 federal tax form 1040   If you bought or sold real estate during the year, the real estate taxes must be divided between the buyer and the seller. 2009 federal tax form 1040   The buyer and the seller must divide the real estate taxes according to the number of days in the real property tax year (the period to which the tax is imposed relates) that each owned the property. 2009 federal tax form 1040 The seller is treated as paying the taxes up to, but not including, the date of sale. 2009 federal tax form 1040 The buyer is treated as paying the taxes beginning with the date of sale. 2009 federal tax form 1040 This applies regardless of the lien dates under local law. 2009 federal tax form 1040 Generally, this information is included on the settlement statement provided at the closing. 2009 federal tax form 1040    If you (the seller) cannot deduct taxes until they are paid because you use the cash method of accounting, and the buyer of your property is personally liable for the tax, you are considered to have paid your part of the tax at the time of the sale. 2009 federal tax form 1040 This lets you deduct the part of the tax to the date of sale even though you did not actually pay it. 2009 federal tax form 1040 However, you must also include the amount of that tax in the selling price of the property. 2009 federal tax form 1040 The buyer must include the same amount in his or her cost of the property. 2009 federal tax form 1040   You figure your deduction for taxes on each property bought or sold during the real property tax year as follows. 2009 federal tax form 1040 Worksheet 22-1. 2009 federal tax form 1040 Figuring Your Real Estate Tax Deduction 1. 2009 federal tax form 1040 Enter the total real estate taxes for the real property tax year   2. 2009 federal tax form 1040 Enter the number of days in the real property tax year that you owned the property   3. 2009 federal tax form 1040 Divide line 2 by 365 (for leap years, divide line 2 by 366) . 2009 federal tax form 1040 4. 2009 federal tax form 1040 Multiply line 1 by line 3. 2009 federal tax form 1040 This is your deduction. 2009 federal tax form 1040 Enter it on Schedule A (Form 1040), line 6   Note. 2009 federal tax form 1040 Repeat steps 1 through 4 for each property you bought or sold during the real property tax year. 2009 federal tax form 1040 Your total deduction is the sum of the line 4 amounts for all of the properties. 2009 federal tax form 1040 Real estate taxes for prior years. 2009 federal tax form 1040   Do not divide delinquent taxes between the buyer and seller if the taxes are for any real property tax year before the one in which the property is sold. 2009 federal tax form 1040 Even if the buyer agrees to pay the delinquent taxes, the buyer cannot deduct them. 2009 federal tax form 1040 The buyer must add them to the cost of the property. 2009 federal tax form 1040 The seller can deduct these taxes paid by the buyer. 2009 federal tax form 1040 However, the seller must include them in the selling price. 2009 federal tax form 1040 Examples. 2009 federal tax form 1040   The following examples illustrate how real estate taxes are divided between buyer and seller. 2009 federal tax form 1040 Example 1. 2009 federal tax form 1040 Dennis and Beth White's real property tax year for both their old home and their new home is the calendar year, with payment due August 1. 2009 federal tax form 1040 The tax on their old home, sold on May 7, was $620. 2009 federal tax form 1040 The tax on their new home, bought on May 3, was $732. 2009 federal tax form 1040 Dennis and Beth are considered to have paid a proportionate share of the real estate taxes on the old home even though they did not actually pay them to the taxing authority. 2009 federal tax form 1040 On the other hand, they can claim only a proportionate share of the taxes they paid on their new property even though they paid the entire amount. 2009 federal tax form 1040 Dennis and Beth owned their old home during the real property tax year for 126 days (January 1 to May 6, the day before the sale). 2009 federal tax form 1040 They figure their deduction for taxes on their old home as follows. 2009 federal tax form 1040 Worksheet 22-1. 2009 federal tax form 1040 Figuring Your Real Estate Tax Deduction — Taxes on Old Home 1. 2009 federal tax form 1040 Enter the total real estate taxes for the real property tax year $620 2. 2009 federal tax form 1040 Enter the number of days in the real property tax year that you owned the property 126 3. 2009 federal tax form 1040 Divide line 2 by 365 (for leap years, divide line 2 by 366) . 2009 federal tax form 1040 3452 4. 2009 federal tax form 1040 Multiply line 1 by line 3. 2009 federal tax form 1040 This is your deduction. 2009 federal tax form 1040 Enter it on Schedule A (Form 1040), line 6 $214 Since the buyers of their old home paid all of the taxes, Dennis and Beth also include the $214 in the selling price of the old home. 2009 federal tax form 1040 (The buyers add the $214 to their cost of the home. 2009 federal tax form 1040 ) Dennis and Beth owned their new home during the real property tax year for 243 days (May 3 to December 31, including their date of purchase). 2009 federal tax form 1040 They figure their deduction for taxes on their new home as follows. 2009 federal tax form 1040 Worksheet 22-1. 2009 federal tax form 1040 Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. 2009 federal tax form 1040 Enter the total real estate taxes for the real property tax year $732 2. 2009 federal tax form 1040 Enter the number of days in the real property tax year that you owned the property 243 3. 2009 federal tax form 1040 Divide line 2 by 365 (for leap years, divide line 2 by 366) . 2009 federal tax form 1040 6658 4. 2009 federal tax form 1040 Multiply line 1 by line 3. 2009 federal tax form 1040 This is your deduction. 2009 federal tax form 1040 Enter it on Schedule A (Form 1040), line 6 $487 Since Dennis and Beth paid all of the taxes on the new home, they add $245 ($732 paid less $487 deduction) to their cost of the new home. 2009 federal tax form 1040 (The sellers add this $245 to their selling price and deduct the $245 as a real estate tax. 2009 federal tax form 1040 ) Dennis and Beth's real estate tax deduction for their old and new homes is the sum of $214 and $487, or $701. 2009 federal tax form 1040 They will enter this amount on Schedule A (Form 1040), line 6. 2009 federal tax form 1040 Example 2. 2009 federal tax form 1040 George and Helen Brown bought a new home on May 3, 2013. 2009 federal tax form 1040 Their real property tax year for the new home is the calendar year. 2009 federal tax form 1040 Real estate taxes for 2012 were assessed in their state on January 1, 2013. 2009 federal tax form 1040 The taxes became due on May 31, 2013, and October 31, 2013. 2009 federal tax form 1040 The Browns agreed to pay all taxes due after the date of purchase. 2009 federal tax form 1040 Real estate taxes for 2012 were $680. 2009 federal tax form 1040 They paid $340 on May 31, 2013, and $340 on October 31, 2013. 2009 federal tax form 1040 These taxes were for the 2012 real property tax year. 2009 federal tax form 1040 The Browns cannot deduct them since they did not own the property until 2013. 2009 federal tax form 1040 Instead, they must add $680 to the cost of their new home. 2009 federal tax form 1040 In January 2014, the Browns receive their 2013 property tax statement for $752, which they will pay in 2014. 2009 federal tax form 1040 The Browns owned their new home during the 2013 real property tax year for 243 days (May 3 to December 31). 2009 federal tax form 1040 They will figure their 2014 deduction for taxes as follows. 2009 federal tax form 1040 Worksheet 22-1. 2009 federal tax form 1040 Figuring Your Real Estate Tax Deduction — Taxes on New Home 1. 2009 federal tax form 1040 Enter the total real estate taxes for the real property tax year $752 2. 2009 federal tax form 1040 Enter the number of days in the real property tax year that you owned the property 243 3. 2009 federal tax form 1040 Divide line 2 by 365 (for leap years, divide line 2 by 366) . 2009 federal tax form 1040 6658 4. 2009 federal tax form 1040 Multiply line 1 by line 3. 2009 federal tax form 1040 This is your deduction. 2009 federal tax form 1040 Claim it on Schedule A (Form 1040), line 6 $501 The remaining $251 ($752 paid less $501 deduction) of taxes paid in 2014, along with the $680 paid in 2013, is added to the cost of their new home. 2009 federal tax form 1040 Because the taxes up to the date of sale are considered paid by the seller on the date of sale, the seller is entitled to a 2013 tax deduction of $931. 2009 federal tax form 1040 This is the sum of the $680 for 2012 and the $251 for the 122 days the seller owned the home in 2013. 2009 federal tax form 1040 The seller must also include the $931 in the selling price when he or she figures the gain or loss on the sale. 2009 federal tax form 1040 The seller should contact the Browns in January 2014 to find out how much real estate tax is due for 2013. 2009 federal tax form 1040 Form 1099-S. 2009 federal tax form 1040   For certain sales or exchanges of real estate, the person responsible for closing the sale (generally the settlement agent) prepares Form 1099-S, Proceeds From Real Estate Transactions, to report certain information to the IRS and to the seller of the property. 2009 federal tax form 1040 Box 2 of Form 1099-S is for the gross proceeds from the sale and should include the portion of the seller's real estate tax liability that the buyer will pay after the date of sale. 2009 federal tax form 1040 The buyer includes these taxes in the cost basis of the property, and the seller both deducts this amount as a tax paid and includes it in the sales price of the property. 2009 federal tax form 1040   For a real estate transaction that involves a home, any real estate tax the seller paid in advance but that is the liability of the buyer appears on Form 1099-S, box 5. 2009 federal tax form 1040 The buyer deducts this amount as a real estate tax, and the seller reduces his or her real estate tax deduction (or includes it in income) by the same amount. 2009 federal tax form 1040 See Refund (or rebate) , later. 2009 federal tax form 1040 Taxes placed in escrow. 2009 federal tax form 1040   If your monthly mortgage payment includes an amount placed in escrow (put in the care of a third party) for real estate taxes, you may not be able to deduct the total amount placed in escrow. 2009 federal tax form 1040 You can deduct only the real estate tax that the third party actually paid to the taxing authority. 2009 federal tax form 1040 If the third party does not notify you of the amount of real estate tax that was paid for you, contact the third party or the taxing authority to find the proper amount to show on your return. 2009 federal tax form 1040 Tenants by the entirety. 2009 federal tax form 1040   If you and your spouse held property as tenants by the entirety and you file separate federal returns, each of you can deduct only the taxes each of you paid on the property. 2009 federal tax form 1040 Divorced individuals. 2009 federal tax form 1040   If your divorce or separation agreement states that you must pay the real estate taxes for a home owned by you and your spouse, part of your payments may be deductible as alimony and part as real estate taxes. 2009 federal tax form 1040 See Taxes and insurance in chapter 18 for more information. 2009 federal tax form 1040 Ministers' and military housing allowances. 2009 federal tax form 1040   If you are a minister or a member of the uniformed services and receive a housing allowance that you can exclude from income, you still can deduct all of the real estate taxes you pay on your home. 2009 federal tax form 1040 Refund (or rebate). 2009 federal tax form 1040   If you received a refund or rebate in 2013 of real estate taxes you paid in 2013, you must reduce your deduction by the amount refunded to you. 2009 federal tax form 1040 If you received a refund or rebate in 2013 of real estate taxes you deducted in an earlier year (either as an itemized deduction or an increase to your standard deduction), you generally must include the refund or rebate in income in the year you receive it. 2009 federal tax form 1040 However, the amount you include in income is limited to the amount of the deduction that reduced your tax in the earlier year. 2009 federal tax form 1040 For more information, see Recoveries in chapter 12. 2009 federal tax form 1040 Table 22-1. 2009 federal tax form 1040 Which Taxes Can You Deduct? Type of Tax You Can Deduct You Cannot Deduct Fees and Charges Fees and charges that are expenses of your trade or business or of producing income. 2009 federal tax form 1040 Fees and charges that are not expenses of your trade or business or of producing income, such as fees for driver's licenses, car inspections, parking, or charges for water bills (see Taxes and Fees You Cannot Deduct ). 2009 federal tax form 1040     Fines and penalties. 2009 federal tax form 1040 Income Taxes State and local income taxes. 2009 federal tax form 1040 Federal income taxes. 2009 federal tax form 1040   Foreign income taxes. 2009 federal tax form 1040     Employee contributions to state funds listed under Contributions to state benefit funds . 2009 federal tax form 1040 Employee contributions to private or voluntary disability plans. 2009 federal tax form 1040     State and local general sales taxes if you choose to deduct state and local income taxes. 2009 federal tax form 1040 General Sales Taxes State and local general sales taxes, including compensating use taxes. 2009 federal tax form 1040 State and local income taxes if you choose to deduct state and local general sales taxes. 2009 federal tax form 1040 Other Taxes Taxes that are expenses of your trade or business. 2009 federal tax form 1040 Federal excise taxes, such as tax on gasoline, that are not expenses of your trade or business or of producing income. 2009 federal tax form 1040   Taxes on property producing rent or royalty income. 2009 federal tax form 1040 Per capita taxes. 2009 federal tax form 1040   Occupational taxes. 2009 federal tax form 1040 See chapter 28. 2009 federal tax form 1040     One-half of self-employment tax paid. 2009 federal tax form 1040   Personal Property Taxes State and local personal property taxes. 2009 federal tax form 1040 Customs duties that are not expenses of your trade or business or of producing income. 2009 federal tax form 1040 Real Estate Taxes State and local real estate taxes. 2009 federal tax form 1040 Real estate taxes that are treated as imposed on someone else (see Division of real estate taxes between buyers and sellers ). 2009 federal tax form 1040   Foreign real estate taxes. 2009 federal tax form 1040 Taxes for local benefits (with exceptions). 2009 federal tax form 1040 See Real Estate-Related Items You Cannot Deduct . 2009 federal tax form 1040   Tenant's share of real estate taxes paid by  cooperative housing corporation. 2009 federal tax form 1040 Trash and garbage pickup fees (with exceptions). 2009 federal tax form 1040 See Real Estate-Related Items You Cannot Deduct . 2009 federal tax form 1040     Rent increase due to higher real estate taxes. 2009 federal tax form 1040     Homeowners' association charges. 2009 federal tax form 1040 Real Estate-Related Items You Cannot Deduct Payments for the following items generally are not deductible as real estate taxes. 2009 federal tax form 1040 Taxes for local benefits. 2009 federal tax form 1040 Itemized charges for services (such as trash and garbage pickup fees). 2009 federal tax form 1040 Transfer taxes (or stamp taxes). 2009 federal tax form 1040 Rent increases due to higher real estate taxes. 2009 federal tax form 1040 Homeowners' association charges. 2009 federal tax form 1040 Taxes for local benefits. 2009 federal tax form 1040   Deductible real estate taxes generally do not include taxes charged for local benefits and improvements tending to increase the value of your property. 2009 federal tax form 1040 These include assessments for streets, sidewalks, water mains, sewer lines, public parking facilities, and similar improvements. 2009 federal tax form 1040 You should increase the basis of your property by the amount of the assessment. 2009 federal tax form 1040   Local benefit taxes are deductible only if they are for maintenance, repair, or interest charges related to those benefits. 2009 federal tax form 1040 If only a part of the taxes is for maintenance, repair, or interest, you must be able to show the amount of that part to claim the deduction. 2009 federal tax form 1040 If you cannot determine what part of the tax is for maintenance, repair, or interest, none of it is deductible. 2009 federal tax form 1040    Taxes for local benefits may be included in your real estate tax bill. 2009 federal tax form 1040 If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. 2009 federal tax form 1040 You should use the rules above to determine if the local benefit tax is deductible. 2009 federal tax form 1040 Contact the taxing authority if you need additional information about a specific charge on your real estate tax bill. 2009 federal tax form 1040 Itemized charges for services. 2009 federal tax form 1040    An itemized charge for services assessed against specific property or certain people is not a tax, even if the charge is paid to the taxing authority. 2009 federal tax form 1040 For example, you cannot deduct the charge as a real estate tax if it is: A unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), A periodic charge for a residential service (such as a $20 per month or $240 annual fee charged to each homeowner for trash collection), or A flat fee charged for a single service provided by your government (such as a $30 charge for mowing your lawn because it was allowed to grow higher than permitted under your local ordinance). 2009 federal tax form 1040    You must look at your real estate tax bill to determine if any nondeductible itemized charges, such as those listed above, are included in the bill. 2009 federal tax form 1040 If your taxing authority (or mortgage lender) does not furnish you a copy of your real estate tax bill, ask for it. 2009 federal tax form 1040 Exception. 2009 federal tax form 1040   Service charges used to maintain or improve services (such as trash collection or police and fire protection) are deductible as real estate taxes if: The fees or charges are imposed at a like rate against all property in the taxing jurisdiction, The funds collected are not earmarked; instead, they are commingled with general revenue funds, and Funds used to maintain or improve services are not limited to or determined by the amount of these fees or charges collected. 2009 federal tax form 1040 Transfer taxes (or stamp taxes). 2009 federal tax form 1040   Transfer taxes and similar taxes and charges on the sale of a personal home are not deductible. 2009 federal tax form 1040 If they are paid by the seller, they are expenses of the sale and reduce the amount realized on the sale. 2009 federal tax form 1040 If paid by the buyer, they are included in the cost basis of the property. 2009 federal tax form 1040 Rent increase due to higher real estate taxes. 2009 federal tax form 1040   If your landlord increases your rent in the form of a tax surcharge because of increased real estate taxes, you cannot deduct the increase as taxes. 2009 federal tax form 1040 Homeowners' association charges. 2009 federal tax form 1040   These charges are not deductible because they are imposed by the homeowners' association, rather than the state or local government. 2009 federal tax form 1040 Personal Property Taxes Personal property tax is deductible if it is a state or local tax that is: Charged on personal property, Based only on the value of the personal property, and Charged on a yearly basis, even if it is collected more or less than once a year. 2009 federal tax form 1040 A tax that meets the above requirements can be considered charged on personal property even if it is for the exercise of a privilege. 2009 federal tax form 1040 For example, a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor vehicles or using them on the highways. 2009 federal tax form 1040 If the tax is partly based on value and partly based on other criteria, it may qualify in part. 2009 federal tax form 1040 Example. 2009 federal tax form 1040 Your state charges a yearly motor vehicle registration tax of 1% of value plus 50 cents per hundredweight. 2009 federal tax form 1040 You paid $32 based on the value ($1,500) and weight (3,400 lbs. 2009 federal tax form 1040 ) of your car. 2009 federal tax form 1040 You can deduct $15 (1% × $1,500) as a personal property tax because it is based on the value. 2009 federal tax form 1040 The remaining $17 ($. 2009 federal tax form 1040 50 × 34), based on the weight, is not deductible. 2009 federal tax form 1040 Taxes and Fees You Cannot Deduct Many federal, state, and local government taxes are not deductible because they do not fall within the categories discussed earlier. 2009 federal tax form 1040 Other taxes and fees, such as federal income taxes, are not deductible because the tax law specifically prohibits a deduction for them. 2009 federal tax form 1040 See Table 22-1. 2009 federal tax form 1040 Taxes and fees that are generally not deductible include the following items. 2009 federal tax form 1040 Employment taxes. 2009 federal tax form 1040 This includes social security, Medicare, and railroad retirement taxes withheld from your pay. 2009 federal tax form 1040 However, one-half of self-employment tax you pay is deductible. 2009 federal tax form 1040 In addition, the social security and other employment taxes you pay on the wages of a household worker may be included in medical expenses that you can deduct or child care expenses that allow you to claim the child and dependent care credit. 2009 federal tax form 1040 For more information, see chapters 21 and 32. 2009 federal tax form 1040 Estate, inheritance, legacy, or succession taxes. 2009 federal tax form 1040 However, you can deduct the estate tax attributable to income in respect of a decedent if you, as a beneficiary, must include that income in your gross income. 2009 federal tax form 1040 In that case, deduct the estate tax as a miscellaneous deduction that is not subject to the 2%-of-adjusted-gross-income limit. 2009 federal tax form 1040 For more information, see Publication 559, Survivors, Executors, and Administrators. 2009 federal tax form 1040 Federal income taxes. 2009 federal tax form 1040 This includes income taxes withheld from your pay. 2009 federal tax form 1040 Fines and penalties. 2009 federal tax form 1040 You cannot deduct fines and penalties paid to a government for violation of any law, including related amounts forfeited as collateral deposits. 2009 federal tax form 1040 Gift taxes. 2009 federal tax form 1040 License fees. 2009 federal tax form 1040 You cannot deduct license fees for personal purposes (such as marriage, driver's, and dog license fees). 2009 federal tax form 1040 Per capita taxes. 2009 federal tax form 1040 You cannot deduct state or local per capita taxes. 2009 federal tax form 1040 Many taxes and fees other than those listed above are also nondeductible, unless they are ordinary and necessary expenses of a business or income producing activity. 2009 federal tax form 1040 For other nondeductible items, see Real Estate-Related Items You Cannot Deduct , earlier. 2009 federal tax form 1040 Where To Deduct You deduct taxes on the following schedules. 2009 federal tax form 1040 State and local income taxes. 2009 federal tax form 1040    These taxes are deducted on Schedule A (Form 1040), line 5, even if your only source of income is from business, rents, or royalties. 2009 federal tax form 1040 Check box a on line 5. 2009 federal tax form 1040 General sales taxes. 2009 federal tax form 1040   Sales taxes are deducted on Schedule A (Form 1040), line 5. 2009 federal tax form 1040 You must check box b on line 5. 2009 federal tax form 1040 If you elect to deduct sales taxes, you cannot deduct state and local income taxes on Schedule A (Form 1040), line 5, box a. 2009 federal tax form 1040 Foreign income taxes. 2009 federal tax form 1040   Generally, income taxes you pay to a foreign country or U. 2009 federal tax form 1040 S. 2009 federal tax form 1040 possession can be claimed as an itemized deduction on Schedule A (Form 1040), line 8, or as a credit against your U. 2009 federal tax form 1040 S. 2009 federal tax form 1040 income tax on Form 1040, line 47. 2009 federal tax form 1040 To claim the credit, you may have to complete and attach Form 1116. 2009 federal tax form 1040 For more information, see chapter 37, the Form 1040 instructions, or Publication 514. 2009 federal tax form 1040 Real estate taxes and personal property taxes. 2009 federal tax form 1040    Real estate and personal property taxes are deducted on Schedule A (Form 1040), lines 6 and 7, respectively, unless they are paid on property used in your business, in which case they are deducted on Schedule C, Schedule C-EZ, or Schedule F (Form 1040). 2009 federal tax form 1040 Taxes on property that produces rent or royalty income are deducted on Schedule E (Form 1040). 2009 federal tax form 1040 Self-employment tax. 2009 federal tax form 1040    Deduct one-half of your self-employment tax on Form 1040, line 27. 2009 federal tax form 1040 Other taxes. 2009 federal tax form 1040    All other deductible taxes are deducted on Schedule A (Form 1040), line 8. 2009 federal tax form 1040 Prev  Up  Next   Home   More Online Publications
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The 2009 Federal Tax Form 1040

2009 federal tax form 1040 Part Three -   Gains and Losses The four chapters in this part discuss investment gains and losses, including how to figure your basis in property. 2009 federal tax form 1040 A gain from selling or trading stocks, bonds, or other investment property may be taxed or it may be tax free, at least in part. 2009 federal tax form 1040 A loss may or may not be deductible. 2009 federal tax form 1040 These chapters also discuss gains from selling property you personally use — including the special rules for selling your home. 2009 federal tax form 1040 Nonbusiness casualty and theft losses are discussed in chapter 25 in Part Five. 2009 federal tax form 1040 Table of Contents 13. 2009 federal tax form 1040   Basis of PropertyIntroduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds 14. 2009 federal tax form 1040   Sale of PropertyReminder Introduction Useful Items - You may want to see: Sales and TradesWhat Is a Sale or Trade? How To Figure Gain or Loss Nontaxable Trades Transfers Between Spouses Related Party Transactions Capital Gains and LossesCapital or Ordinary Gain or Loss Capital Assets and Noncapital Assets Holding Period Nonbusiness Bad Debts Wash Sales Rollover of Gain From Publicly Traded Securities 15. 2009 federal tax form 1040   Selling Your HomeReminder Introduction Useful Items - You may want to see: Main Home Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Business Use or Rental of Home Reporting the SaleSeller-financed mortgage. 2009 federal tax form 1040 More information. 2009 federal tax form 1040 Special SituationsException for sales to related persons. 2009 federal tax form 1040 Recapturing (Paying Back) a Federal Mortgage Subsidy 16. 2009 federal tax form 1040   Reporting Gains and Losses What's New Introduction Useful Items - You may want to see: Reporting Capital Gains and Losses Exception 1. 2009 federal tax form 1040 Exception 2. 2009 federal tax form 1040 File Form 1099-B or Form 1099-S with the IRS. 2009 federal tax form 1040 Capital Losses Capital Gain Tax Rates Prev  Up  Next   Home   More Online Publications