J.K. Lasser's 1001 Deductions and Tax Breaks 2013: Your Complete Guide to Everything Deductible

CHAPTER 16

Miscellaneous Items

Alert

At the time this book was printed, Congress had not extended numerous breaks for 2012 that had expired at the end of 2011. Check the online supplement in February 2013 at www.jklasser.com or www.barbaraweltman.com to see whether these breaks apply for 2012 returns.

There are some tax benefits that simply defy classification so they cannot be included in any other chapter. You may be entitled to claim them nonetheless.

This chapter explains:

• State and local income taxes
• State and local sales taxes
• Certain federal taxes
• Tax refunds
• Tax preparation costs
• Tax audits
• Legal fees
• Gifts you receive
• Inheritances
• Life insurance proceeds
• Estate tax deduction on income in respect of a decedent
• Rebates and discounts
• Government benefits
• Alternative minimum tax

For more information see IRS Publication 525, Taxable and Nontaxable Income, and IRS Publication 529, Miscellaneous Deductions.

State and Local Income Taxes

Individuals in all but 7 states (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming) and the District of Columbia may be subject to income taxes (those in New Hampshire and Tennessee have an income tax on interest income and dividends only). There may also be income taxes on the local level. These taxes are deductible for federal income tax purposes if you itemize deductions.

Benefit

If you pay state and local income tax, ...