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Does anyone know if mortgage interest, mortgage insurance and property taxes are deductible for not only federal but state income taxes?

This may be a state-by-state issue, but if anyone has experience in a particular state or can find the information for all states, it would be appreciated.

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Not answering because I'm not sure depending on your state. But the odds are very much against the ability in any case to deduct it in both in the same year. –  JohnFx Jun 19 '10 at 18:13
    
@JohnFx - Based on a conversation with a family member it actually looks like its deductible on both state & federal taxes. I'll try to do more research to confirm this and then answer my own question assuming no one else answers. –  CrimsonX Jun 21 '10 at 20:29
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up vote 2 down vote accepted

In Minnesota, based on the this website, I believe that anything that is deductible for federal income taxes is deductible for the Minnesota State income tax.

What is federal taxable income (FTI)?

Federal taxable income is the tax base used to calculate federal income tax liability. It is also the starting point for calculating Minnesota taxable income, the tax base used to calculate Minnesota income tax liability. Federal taxable income equals federal adjusted gross income (FAGI) after deductions and exemptions.

Specifically, these are excluded (bold added by myself):

What kinds of income are excluded from FAGI?

FAGI excludes: deductible IRA, SEP, and SIMPLE contributions; nontaxable employee fringe benefits; student loan interest payments; Health Savings Account contributions and investment income; moving expenses; one-half of self-employment tax; health insurance premiums (for self-employed taxpayers only); penalty on early withdrawal of savings; alimony paid by the taxpayer; for tax year 2008 only, the first $500 of property taxes paid by standard deduction filers ($1,000 for married joint filers); and, through tax year 2009, $250 of teacher classroom expenses and $4,000 of tuition expenses for higher education. FAGI does not exclude child support paid by the taxpayer.

And finally the key statements:

What itemized deductions are allowed?

Itemized deductions are allowed for the following:

  • Payments of state and local property taxes and income taxes
  • Mortgage interest
  • Charitable contributions
  • Medical expenses in excess of 7.5 percent of income
  • Casualty and theft losses in excess of 10 percent of income
  • Job expenses and miscellaneous expenses (most only allowed in excess of 2 percent of income)

Obviously this isn't foolproof, as tax law always has "exceptions" but this is the best answer I've found so far.

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