Deductions & credits

@joelmarcia 

A tax deduction reduces your taxable income on which the tax you owe is calculated.  The federal government allows you to deduct state taxes that you pay, if you itemize your deductions. That reduces your federal taxable income because your income was reduced because of paying state taxes.

 

Some states allow you to deduct federal taxes for the purpose of calculating state income tax. In other words, because your state taxable income is reduced because you had to pay federal taxes, your state tax calculation does not include the money you already sent to the federal government.

 

No state allows you to deduct state taxes paid from your income used to calculate state taxes owed.

 

Your state has decided that it will tax your income from working in a certain way, and it will tax your property in a certain way, and it will tax purchases you make in a certain way. The fact that you also pay tax on your purchases does not reduce the tax you pay on your income. That’s just how the state law tax is you, and if you don’t like it, you need to talk to your state legislature.

 

And sure, it means you pay taxes twice on some of the same money. That’s life in America.