Where do I deduct prior year State Tax on Partnership?? - Tax Forum - Tax Help Forum, Payroll Tax Forum, Business Tax Forum, Tax Questions, Free Tax Advice

hodgesh · 03-28-2009, 06:36 PM

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Help!!!!!! I'm very confused. Last year (tax year 2007) we filed our New Jersey partnership return and submitted a check to New Jersey for the "partnership tax". For this year (2008), where would I deduct the amount paid to NJ on the federal return? Would the deduction be under state taxes on Schedule A of personal return or should it go on line 14 on Form 1065??? Thanks!!!!

Skyhawk · 05-12-2009, 03:26 PM

Ordinary and necessary expenses of the partnership, with few exceptions, are deducted at the partnership level and used to arrive at the partnerships net income, which is distributed to the partners for tax purposes. A few partnership expenses are deducted at the partner level, such as charitable contributions, because of limitations at the individual level. Partnership returns are complex and should be prepared by tax professionals, such as a CPA or Enrolled Agent.

WebTaxOffice · 11-20-2009, 05:38 PM

You can dedut the state taxes paid as the necessary and ordinary expense of the business.