Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Itemized Deductions

Taxes that May be Deductible

Deductible Taxes

State and local income taxes

If the taxpayer can deduct state and local income taxes on Schedule A, include tax withheld, estimated tax payments made in good faith to a state or local government, and tax for an earlier year paid during the current tax year. Do not include penalties or interest.

Tip

State and local tax withheld is sometimes shown on Form W-2 in either box 17 or 19.

Real estate taxes

Real estate taxes are reported on Form 1040, Schedule A, line 6.

Other taxes

Personal property taxes are reported on Schedule A, line 7. Other taxes are reported on Schedule A, line 8.

Foreign income taxes

Generally, income taxes paid to a foreign country can be taken as:

  • An itemized deduction on line 8 of Schedule A and entered on Form 1040, line 40, or
  • A credit against U.S. income tax on Form 1040, line 47

More information will be provided on the foreign tax credit in subsequent lessons. Compare the difference between claiming the foreign tax paid as a nonrefundable credit to including it on Schedule A as an itemized deduction. Use whichever results in the lowest tax.