Are payments of federal back taxes deductible in the year the payments are made?

by David A. Caplan, CPA | Jul 25, 2019

We were notified by the IRS a couple of years ago that we owed more taxes for the 2014 tax year. With interest and penalties, the amount we owe now is up to about $8,800. Since we don't have the money to pay this amount, we were hoping to send in an offer-in-compromise. But before we do that, we need to know if we do make any payments for the back-due taxes, is that amount deductible in the year taxes are paid? Example: If we paid $5,000 to the IRS this year for the old taxes, do we count that as taxes paid this year, 2019? Whenever you do your taxes, they ask you how much in taxes have you already paid so far in the year. 

Payment of federal tax is not deductible on your federal return. The deduction is only for state, local, and property tax. 

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Answered by: David A. Caplan, CPA, is a sole practitioner in Lafayette Hill, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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