Where To Deduct(p150)

You deduct taxes on the following schedules.

These taxes are deducted on Schedule A (Form 1040), line 5a, even if your only source of income is from business, rents, or royalties. Check box a on line 5 to indicate income taxes.

Sales taxes are deducted on Schedule A (Form 1040), line 5b. You must check box b on line 5. If you elect to deduct sales taxes, you cannot deduct state and local income taxes.

Generally, income taxes you pay to a foreign country or U.S. possession can be claimed as an itemized deduction on Schedule A (Form 1040), line 8, or as a credit against your U.S. income tax on Form 1040, line 47. To claim the credit, you may have to complete and attach Form 1116. For more information, see chapter 37, the Form 1040 instructions, or Publication 514.

These taxes are deducted on Schedule A (Form 1040), lines 6 and 7, respectively, unless they are paid on property used in your business, in which case they are deducted on Schedule C, Schedule C-EZ, or Schedule F (Form 1040). Taxes on property that produces rent or royalty income are deducted on Schedule E (Form 1040).

Deduct one-half of your self-employment tax on Form 1040, line 27.

All other deductible taxes are deducted on Schedule A (Form 1040), line 8.