|
Posted by A.G. Kalman on October 24, 2006, 7:08 am
Please log in for more thread options
Herb Smith wrote:
> FredK wrote:
>> This is a follow-up question to my question last month.
> If that thread contained information relevant to this
> current question, you should have posted this as another
> message on that thread or repeated the relevant information.
> Most of us do not have the time or inclination to search for
> your previous message thread.
>> I want to convert $52,000 from a traditional IRA to a Roth IRA
>> this year (2006). My AGI for 2006 will be about $90K.
>>
>> I'll owe about $4800 in California state taxes (9.3% x
>> $52,000) on the conversion.
>>
>> If I pay the $4800 to CA (plus any addditional taxes related
>> to my income) on, say, April 15, 2007 (for tax year 2006), I
>> believe that means I can deduct that $4800 from my 2007
>> income taxes when I fill out those forms in April 2008.
> Correct, if you pay the state tax in 2007, it is an
> allowable deduction on your 2007 federal return, assuming
> you qualify to itemize deductions.
>> However, if I pay the $4800 to CA as estimated tax on in
>> 2006, doesn't this mean I could deduct that $4800 from my
>> 2006 federal income taxes when I fill out those forms in
>> April 2007 (because I would have paid the tax in 2006)?
> Correct again.
>> If so, does it matter what day I pay that $4800 to CA? Could
>> I wait until the end of December?
> As long as you make the payment before the end of December
> 2006, it is a valid deduction for 2006 federal return.
>> I've never paid estimated tax before, but I don't think I'm
>> going to owe any penalties based on my previous post in this
>> thread (Sep 26). My concern is that the due dates for
>> estimated 2006 taxes according to the CA website
>> (http://www.ftb.ca.gov/forms/06_forms/index.html) are
>> 4/17/06, 6/15/06, 9/15/06, and 1/15/07 and I just want to
>> pay the $4800 in one lump payment at the end of the year.
> Then make sure that you send that payment of state tax
> BEFORE the end of 2006, if you want to claim the deduction
> on your 2006 federal return.
Watch out for the AMT. State income taxes are not
deductible.
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap