Artemus
Veteran Member
Got a bit of a dilemma on how to file our income tax. Turns out if we itemize our deductions on our federal income tax we minimize our federal taxes and our state taxes are higher since the state removes the deduction for state taxes paid. If we take the standard federal deduction, our federal taxes go up but our state taxes go down almost exactly the same amount since the standard deduction is fully recognized by the state. (The alternative minimum tax kicks in on federal if we itemize so that is why it nearly balances either way.) The swing between state and federal is just over $400. So should we
1. Itemize federal and pay more to the state, which badly needs the money but only because of its terrible fiscal policies,
2. Take the standard federal deduction and give the money to the federal government, knowing in my heart that the extra $400 will support the Mueller investigation,
or 3. Do whatever minimizes the total tax bill, because hey, $39 savings will pay over half the annual fees for a Costco basic membership?
I won't tell you which option saves us $39 since that might bias your input.
1. Itemize federal and pay more to the state, which badly needs the money but only because of its terrible fiscal policies,
2. Take the standard federal deduction and give the money to the federal government, knowing in my heart that the extra $400 will support the Mueller investigation,
or 3. Do whatever minimizes the total tax bill, because hey, $39 savings will pay over half the annual fees for a Costco basic membership?
I won't tell you which option saves us $39 since that might bias your input.