Where To Deduct

You deduct taxes on the following schedules.

State and local income taxes. These taxes are deducted on line 5 of Schedule A (Form 1040), even if your only source of income is from business, rents, or royalties.

Foreign income taxes. Generally, income taxes you pay to a foreign country or U.S. possession can be claimed as an itemized deduction on line 8 of Schedule A (Form 1040), or as a credit against your U.S. income tax on line 43 of Form 1040. To claim the credit, you may have to complete and attach Form 1116. For more information, see chapter 38 or the instructions for Form 1040 or get Publication 514.

Real estate taxes and personal property taxes. These taxes are deducted on lines 6 and 7 of Schedule A (Form 1040), unless they are paid on property used in your business in which case they are deducted on Schedule C (Form 1040). Taxes on property that produces rent or royalty income are deducted on Schedule E (Form 1040).

Self-employment tax. Deduct one-half of your self-employment tax on line 27, Form 1040.

Other taxes. All other deductible taxes are deducted on line 8 of Schedule A (Form 1040).

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