Which States allow the tax deduction?

[MarylandPizzaman]

Obviously I am from Maryland and wanted to know if MD allows the tax deduction.
Thanks

 

[MarylandPizzaman]

Sorry,
I should have explained my question better,
I want to know about the tax deduction for the annual dues.

 

[Maistre Gracey]

Hi, MarylandPizzaman. I'm not sure about Maryland, but here in Connecticut, our state income tax is just a derivative of our federal return, thus no state deduction.
The property tax portion of the annual dues, as well as any mortgage interest paid, is deductible on my Federal return (of course your tax situation may be different).

Good luck.....

 

[Dean]

Originally posted by Maistre Gracey
Hi, MarylandPizzaman. I'm not sure about Maryland, but here in Connecticut, our state income tax is just a derivative of our federal return, thus no state deduction.
The property tax portion of the annual dues, as well as any mortgage interest paid, is deductible on my Federal return (of course your tax situation may be different).

Good luck.....

If your state income tax is a mathematical function of your federal, you are getting a state deduction for it, just an indirect one. I'd assume any state that allows property tax deductions would allow it but I'd definitely check with your tax professional to be certain.

 

[Richyams]

In general, property tax paid in one state is not deductable against another state's income tax. There may be exceptions, but I have filed NJ, NY and CT state income taxes since owning DVC. The mortgage interest was always deductable, the property taxes weren't, since they were paid to another state.

 

[PamOKW]

LOL! The cap on property tax that is deductible on CT income tax is so low that the DVC portion barely enters into the equation unless you don't own a car or any real estate.

Pizzaman, just a reminder that it isn't the total dues that is deductible, only the real estate tax portion. For OKW in 2002, dues were $3.2163 but only $.6576 per point was the real estate tax portion.

 

[Richyams]

But Pam, I don't think you could deduct them anyway, they were paid to another state.

Maybe our situation was a little different, living in NY and the wife working in Ct, but I recall not being able to deduct much against our Ct return. Not my Ny home property taxes, not my DVC property taxes, none, and the reason was that they were paid to another state.

 

[Geoff_M]

It may depend on the state. We just joined, so I haven't done the research here in Michigan with regard to property taxes, but I do know that in Michigan certain taxes (income tax, for sure) paid to another state are deductable.

 

[PamOKW]

Could be that it's not deductible at all. Since my local house tax alone is many times the allowance I've never looked at it very carefully.

There is a credit formula for income taxes paid to other states but that may not apply to property taxes.

 

[Geoff_M]

However, state tax codes vary so much from state to state that this thread is probably meaningless unless we want to talk about the tax treatment in a single given state. As a side-job my wife and I do fundraisers for a small Mom-n-Pop company that does fundraisers in three states (MI, IN, and OH). Each state takes a very different stance with regard to sales tax collection from not-for-profit groups that sell our products.

MI) A group is given an annual $5,000 exemption on sales. Go one penny over, and sales tax is due on ALL sales. If your group is affiliated with a larger organization like a school, then the exemption is shared by all the groups in the school.

IN) No tax is due as long as the group doesn't sell product for more than 30 days out of the year.

OH) No tax is due as long as each fundraiser lasts no more than 7(?) days.

I'm sure that property tax, and taxes paid to other states also radically vary.

 

[Maistre Gracey]

Originally posted by Dean
If your state income tax is a mathematical function of your federal, you are getting a state deduction for it, just an indirect one. I'd assume any state that allows property tax deductions would allow it but I'd definitely check with your tax professional to be certain.

Well, not really. That would be true if Connecticut started with your federal taxable income, but they don't. Instead they start with your federal adjusted gross income.

The tax tables (supposedly) take into account all deductions, except a small property tax write off (not deduction). This write off is eaten up 20 times over by home #1.

 

[Dean]

Originally posted by Maistre Gracey
Well, not really. That would be true if Connecticut started with your federal taxable income, but they don't. Instead they start with your federal adjusted gross income.

The tax tables (supposedly) take into account all deductions, except a small property tax write off (not deduction). This write off is eaten up 20 times over by home #1.

Bummer, at least you get the federal deduction.

 

[AEN]

These are very dicey areas (I am an accountant). I would recommend discussing with your advisor. While your state may "generally" allow or not allow, your personal situtuation (i.e. income levels) may present a different picture. Even if your state is a derivative off of the Federal, the Federal has some add backs based on income and amount of deductions. I know, it's never simple.