Do business expenses just help to relieve Federal tax, or is state tax included as well?
Do business expenses just help to relieve Federal tax, or is state tax included as well?
When filing you tax return, do business expenses just help to relieve federal tax responsbility, or is state tax responsbility included as well? Thanks!
Answers:
Cheryl B: Both help to lower your taxes some. It just depends on what you can deduct. Talk to your tax person and they can help you out.
2007-07-16 05:12:08
2007-07-16 05:12:08
bostonianinmo: Business expenses are used to determine your net income. Only your net income is subject to income tax at any level, Federal, State or Local.
2007-07-16 05:36:16
2007-07-16 05:36:16
Chosen Answer
starlight_chic06: On state tax returns, your starting number for income tax calculations is the net income for corporations and partnerships (or your adjusted gross income for individuals) from your Federal tax return, where you have already taken deductions for business expenses. From that number there may be some adjustments for items that are taxable on one return, but not the other, or other like adjustments. Tax is then calculated on the adjusted number for states. So, yes, business expenses help reduce both your Federal and State tax liabilities. Hope this helps!!
2007-07-16 05:40:36
starlight_chic06: On state tax returns, your starting number for income tax calculations is the net income for corporations and partnerships (or your adjusted gross income for individuals) from your Federal tax return, where you have already taken deductions for business expenses. From that number there may be some adjustments for items that are taxable on one return, but not the other, or other like adjustments. Tax is then calculated on the adjusted number for states. So, yes, business expenses help reduce both your Federal and State tax liabilities. Hope this helps!!
2007-07-16 05:40:36
Judy: Business expenses lower your net business income, which lowers both your federal and state tax.
2007-07-16 07:30:37
2007-07-16 07:30:37