What Deductions Are Available When Filing Your State Income Tax?


Quick Answer

State income tax deductions vary by state, but can include deductions for education, health savings accounts and business or work-related expenses, according to the Houston Chronicle. A taxpayer may be able to deduct certain federal return items on the associated state return as well.

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Full Answer

Parents with eligible children may be able to deduct certain expenses associated with contributions to a 529 education savings fund. Each state contains different rules regarding deductible tuition plans, explains the Houston Chronicle. As of March 2015, the FinAid website offers additional information on which states are eligible for the 529 contribution deduction.

Certain states also allow taxpayers to take deductions for contributions to Health Savings Accounts, as noted by the Houston Chronicle. These accounts allow taxpayers to set money aside for anticipated, regular medical expenses. Optum Financial Services contains a detailed list of information regarding which states allow deductions for contributions to health savings accounts.

Finally, taxpayers may be eligible to deduct self-employment business expenses on their state return. Common expenses allowed by most states include travel mileage and automobile expenses, states the Houston Chronicle. Other expenses include office supplies and cost of goods sold. Each state has a business tax schedule that explains whether or not these specific deductions are allowed.

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