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Publication 17

Chapter 22

What’s New(p150)

At the time this publication went to print, Congress was considering legislation that would do the following.
  1. Provide additional tax relief for those affected by Hurricane Harvey, Irma, or Maria, and tax relief for those affected by other 2017 disasters, such as the California wildfires.
  2. Extend certain tax benefits that expired at the end of 2016 and that currently can't be claimed on your 2017 tax return.
  3. Change certain other tax provisions.

To learn whether this legislation was enacted resulting in changes that affect your 2017 tax return, go to Recent Developments at
This chapter discusses which taxes you can deduct if you itemize deductions on Schedule A (Form 1040). It also explains which taxes you can deduct on other schedules or forms and which taxes you cannot deduct.
This chapter covers the following topics.
Use Table 22-1 as a guide to determine which taxes you can deduct.
The end of the chapter contains a section that explains which forms you use to deduct different types of taxes.

Business taxes.(p151)

You can deduct certain taxes only if they are ordinary and necessary expenses of your trade or business or of producing income. For information on these taxes, see Pub. 535, Business Expenses.

State or local taxes.(p151)

These are taxes imposed by the 50 states, U.S. possessions, or any of their political subdivisions (such as a county or city), or by the District of Columbia.
Indian tribal government.(p151)
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. 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.

General sales taxes.(p151)

These are taxes imposed at one rate on retail sales of a broad range of classes of items.

Foreign taxes.(p151)

These are taxes imposed by a foreign country or any of its political subdivisions.


Useful items

You may want to see:

 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(p151)

The following two tests must be met for you to deduct any tax.

The tax must be imposed on you.(p151)

In general, you can deduct only taxes imposed on you.
Generally, you can deduct property taxes only if you are an owner of the property. 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.

You must pay the tax during your tax year.(p151)

If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. If you pay your taxes by check and the check is honored by your financial institution, the day you mail or deliver the check is the date of payment. 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. 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). See Pub. 538, Accounting Periods and Methods, for details.
If you use an accrual method of accounting, see Pub. 538 for more information.