Nonbusiness Taxes

State Income Taxes. While state income taxes constitute a large chunk of nonbusiness taxes, there are ways to benefit:

  1. You may deduct your state and local income taxes on your Federal return up to a combined total of $10,000 in 2020 (including property taxes) if you itemize deductions.
  2. If you pay the estimated state income taxes, (typically due on January 15) by December 31, you will gain a larger Federal deduction for the current year.

NOTE: If you are subject to the alternative minimum tax (AMT) this year, you may not benefit from nonbusiness tax deductions because you cannot deduct state taxes for AMT purposes. Please consult with us before prepaying any taxes.