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  • In which year is the Jan estimated state income tax deductible?

    From Not A Clue@21:1/5 to All on Tue Dec 21 10:59:44 2021
    The 4th Q estimated State income taxes for 2021 is payable in Jan 2022.

    If a cash tax payer itemize his deductions, is that 4th Q payment for 2021 deductible in 2022? Or 2021?

    TIA

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  • From ira smilovitz@21:1/5 to Not A Clue on Tue Dec 21 11:34:52 2021
    On Tuesday, December 21, 2021 at 11:02:22 AM UTC-5, Not A Clue wrote:
    The 4th Q estimated State income taxes for 2021 is payable in Jan 2022.

    If a cash tax payer itemize his deductions, is that 4th Q payment for 2021 deductible in 2022? Or 2021?

    TIA

    --

    It's deductible in the year paid, not the year it applies to. For that reason, I recommend that my clients make their Q4 state estimated payments before December 31.

    Ira Smilovitz, EA
    Leonia, NJ

    --
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  • From John Levine@21:1/5 to All on Tue Dec 21 15:13:35 2021
    According to ira smilovitz <ira.smilovitz@gmail.com>:
    On Tuesday, December 21, 2021 at 11:02:22 AM UTC-5, Not A Clue wrote:
    The 4th Q estimated State income taxes for 2021 is payable in Jan 2022.

    If a cash tax payer itemize his deductions, is that 4th Q payment for 2021 deductible in 2022? Or 2021?

    It's deductible in the year paid, not the year it applies to. For that reason, I recommend that my clients make their Q4 state estimated payments before December 31.

    With the $10K limit on SALT deductions, and the $25K standard deduction for MFJ, how often does it make any difference?

    I would think close to never. If you have enough deductions to be worth itemizing, you probably have paid $10K
    of SALT long before the last estimated payment.


    --
    Regards,
    John Levine, johnl@taugh.com, Primary Perpetrator of "The Internet for Dummies",
    Please consider the environment before reading this e-mail. https://jl.ly

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From Not A Clue@21:1/5 to John Levine on Tue Dec 21 20:28:59 2021
    On Tuesday, December 21, 2021 at 3:15:04 PM UTC-5, John Levine wrote:
    According to ira smilovitz <ira.sm...@gmail.com>:
    On Tuesday, December 21, 2021 at 11:02:22 AM UTC-5, Not A Clue wrote:
    The 4th Q estimated State income taxes for 2021 is payable in Jan 2022.

    If a cash tax payer itemize his deductions, is that 4th Q payment for 2021 deductible in 2022? Or 2021?

    It's deductible in the year paid, not the year it applies to. For that reason, I recommend that my clients make their Q4 state estimated payments before December 31.
    With the $10K limit on SALT deductions, and the $25K standard deduction for MFJ, how often does it make any difference?

    I would think close to never. If you have enough deductions to be worth itemizing, you probably have paid $10K
    of SALT long before the last estimated payment.


    --
    Regards,
    John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
    Please consider the environment before reading this e-mail. https://jl.ly
    --

    I was thinking of the potential increase in the cap on SALT; but it looks unlikely to pass this year. Does anyone think that f it pass early in 2022 that it would be effective as of 2021?

    TIA

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From ira smilovitz@21:1/5 to John Levine on Wed Dec 22 10:34:35 2021
    On Tuesday, December 21, 2021 at 3:15:04 PM UTC-5, John Levine wrote:
    According to ira smilovitz <ira.sm...@gmail.com>:
    On Tuesday, December 21, 2021 at 11:02:22 AM UTC-5, Not A Clue wrote:
    The 4th Q estimated State income taxes for 2021 is payable in Jan 2022.

    If a cash tax payer itemize his deductions, is that 4th Q payment for 2021 deductible in 2022? Or 2021?

    It's deductible in the year paid, not the year it applies to. For that reason, I recommend that my clients make their Q4 state estimated payments before December 31.
    With the $10K limit on SALT deductions, and the $25K standard deduction for MFJ, how often does it make any difference?

    I would think close to never. If you have enough deductions to be worth itemizing, you probably have paid $10K
    of SALT long before the last estimated payment.


    --
    Regards,
    John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
    Please consider the environment before reading this e-mail. https://jl.ly
    --

    You are correct that it rarely makes a difference with the SALT cap, but the cap is only temporary (it is scheduled to sunset in 2025) and my clients tend to be repeat clients. I like to keep them trained to do things that make my life easier.

    Ira Smilovitz, EA
    Leonia, NJ

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From JoeTaxpayer@21:1/5 to Not A Clue on Fri Dec 24 12:00:47 2021
    On 12/21/21 8:28 PM, Not A Clue wrote:
    On Tuesday, December 21, 2021 at 3:15:04 PM UTC-5, John Levine wrote:
    According to ira smilovitz <ira.sm...@gmail.com>:
    On Tuesday, December 21, 2021 at 11:02:22 AM UTC-5, Not A Clue wrote:
    The 4th Q estimated State income taxes for 2021 is payable in Jan 2022. >>>>
    If a cash tax payer itemize his deductions, is that 4th Q payment for 2021 deductible in 2022? Or 2021?

    It's deductible in the year paid, not the year it applies to. For that reason, I recommend that my clients make their Q4 state estimated payments before December 31.
    With the $10K limit on SALT deductions, and the $25K standard deduction for MFJ, how often does it make any difference?

    I would think close to never. If you have enough deductions to be worth itemizing, you probably have paid $10K
    of SALT long before the last estimated payment.


    --
    Regards,
    John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
    Please consider the environment before reading this e-mail. https://jl.ly
    --

    I was thinking of the potential increase in the cap on SALT; but it looks unlikely to pass this year. Does anyone think that f it pass early in 2022 that it would be effective as of 2021?

    TIA


    I am keeping optimistic that it will retroactive as long as it passes in
    Q1. SALT cap hit me hard, and I am not a 1%er. I just live in a town
    with high property tax. Friend a few towns over, has a similar value
    house and his tax is 1/2 mine.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From Maria Ku@21:1/5 to All on Mon Dec 27 17:16:07 2021
    It will start making a difference again in 2026 when the 2017 change to individual tax law, including the SALT cap, sunset.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From Scott Seligman@21:1/5 to ira smilovitz on Tue Dec 28 18:58:15 2021
    ira smilovitz <ira.smilovitz@gmail.com> writes:

    It's deductible in the year paid, not the year it applies to. For
    that reason, I recommend that my clients make their Q4 state
    estimated payments before December 31.

    With the $10K limit on SALT deductions, and the $25K standard
    deduction for MFJ, how often does it make any difference?

    You are correct that it rarely makes a difference with the SALT cap,
    but the cap is only temporary (it is scheduled to sunset in 2025) and
    my clients tend to be repeat clients. I like to keep them trained to
    do things that make my life easier.

    Raising the SALT cap was being discussed in the negotiations around
    the BBB legislation that did not pass this year. Conceivably it could
    pass in some form next year.

    If you're in a position where a state tax payment in December would not
    be deductible under current rules, but might be deductible in January if
    they raise the cap in 2022, then it probably makes sense to delay the payment until January just in case.

    Of course there are other possibile things Congress could do such as
    raising the cap retroatively, or inventing new ways to penalize anyone
    paying state taxes next January, but those are far less likely to happen.


    Scott

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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