Iowa Capital Gains Deduction


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Iowa Capital Gains Deduction

Iowa Capital Gains Deduction

For U.S. taxpayers, December is the last opportunity to take significant steps that may reduce the current year’s tax bill. It is also a good time to look for additional tax saving ideas in the coming year. Changes to one’s income or lifestyle, as well as possible new tax legislation require a close look at potential increased tax liability. Tax saving strategies are available through accelerated deductions, charitable donations, and more.

Itemized Tax Deductions

Those who can itemize federal income tax deductions enjoy a considerable amount of flexibility for accelerating some deductions. In particular, itemizers who live in states with a state income tax and those who have a home mortgage can realize some early deductions. Although most people do not enjoy paying tax bills any earlier than required, doing so in these instances can yield additional tax savings.

State income tax payments are one of the itemized deductions allowed by the IRS. To boost the amount of this deduction, taxpayers can make an estimated state tax payment in December for the following year’s state income tax. The additional tax payment can then be included with the current year’s state income tax deductions on the federal tax return.