Press Room: Article

August 03, 2009

Deducting State Taxes – Timing is Everything

As is often the case, tax laws written to solve one problem tend to create unexpected complexities.

Internal Revenue Code Sec. 461(d) is a case in point. This provision was enacted by Congress in the early 1960s to prevent a one-time double deduction of state taxes for federal income tax purposes. Over the course of the next five decades, this single provision has made determining the proper timing for deducting state taxes for federal income tax purposes increasingly challenging, particularly for taxpayers doing business in the state of California…

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