 So don't include sales taxes paid on items used in your trade or business. So if you received a refund or state or local general sales tax in 2022, see refund of general sales taxes earlier. So if you paid for the sales tax on your business, you bought something for the business, then you would expect that you might get a deduction but you would be deducting the whole thing including the sales tax generally you would think or putting it on the books as a depreciable asset and then deducting the depreciation as applicable under the depreciation schedules all in one lump sum because it would include the sales tax that you'd get to deduct the business expense. But if you don't get the business expense then you can only possibly get a benefit for the portion of the purchase that was for sales tax. We talked about the whole refund situation earlier so I won't dive into that again. Line 5B, state and local real estate taxes. So enter online 5B, the state and local taxes you paid on real estate you own that wasn't used for business. So this is the other big one. Someone owns a home, that's the big one. You've got the mortgage interest on it and then you've got the sales tax related to it as well. So remember that the state sales tax, I mean the state taxes could be, how do they, what's their normal taxes? Either they have an income tax or sales tax or both, right? And then you have the question of the deductibility of the state taxes there. And then no matter where you live they almost certainly have a property tax. So a property tax on the home. So now we've got the home and the property tax no matter where you live that you would think there'd be state and local property taxes. The property tax. Then the question is, is the property tax up just a personal home in which case we're looking to take that property tax as a state and local tax deduction on the schedule A. If it was for business use you might be able to take it on the schedule C. If you use part of your home for business home use of an office or something like that then maybe you have to have a ratio of your taxes we might talk about when we get to the schedule C but you can't double dip. You can't deduct both on the schedule C and on A or on home office deduction or whatever. So, but only if the taxes are assessed uniformly at a like rate on all real property throughout the community and the proceeds are used for general community or government purposes. So you got publication 530 explains the deduction homeowners can take. So don't include the following amounts on line 5B. Foreign taxes you paid on real estate. So no foreign taxes. We're not subsidized in foreign taxes here. So it's itemized charges for services to specific property or persons. For example, a $20 monthly charge for house for trash collection, $5 charge for every 1,000 gallons of water consumed or a flat charge for mowing a lawn that had grown higher than permitted under a local ordinance. So those are more like fees. It sounds to me kind of like taxes or you're paying for something goods and services and taxes. Charges for the improvements that tend to increase the value of your property. For example, assessment to build a new sidewalk. So if you're paying for an assessment to build a sidewalk then you're probably paying for an improvement in the home not being taxed for sales tax. So the cost of property improvement is added to the basis of the property. Meaning you're increasing the value of the home so that when you sell the home you'll have less of a gain at the point in time you sell it and that's when you might have a tax benefit from it although the home would be most likely exempt anyways for a large portion of the game. So it might not be all that beneficial to you but there it is. However, a charge is deductible if it is used only to maintain an existing public facility in service. For example, a charge to repair an existing sidewalk and any interest included in that charge. So if your mortgage payments include your real estate taxes you can include only the amount the mortgage company actually paid to the taxing authority. So when you deal with your property taxes you might pay the property taxes directly. So meaning you have a home loan, you're paying off the mortgage with the loan and then you pay the state and locality for your property taxes directly. Sometimes they package those together so that basically your mortgage payments are gonna be paying for both your mortgage and then the mortgage company will actually be paying off the property taxes. So that can be kind of convenient sometimes because then it's one less payment to not miss. Maybe you won't miss. But then the mortgage company should give you the documentation of 1098 which should give you the information in terms of how much you paid in mortgage interest and the real estate taxes. Just remember not to miss that because anytime someone owns a home you would expect that they would have property taxes. So if you don't see it on the 1098 or whatever then you've gotta collect other documentation for it because they have to have property taxes for crying out. So if you sold your home in 2022 any real estate tax charged to the buyer should be shown on your settlement statement and in box six of any form 1099S you received. So this amount is considered a refund of real estate taxes. See refunds and rebates later. Any real estate taxes you paid at closing should be shown on your settlement statement. So that's another kind of issue in terms of when you first purchase a home or when a home is first purchased you've got this issue in terms of the who's gonna handle in the agreement the property taxes, right? So then, and so it could be a little bit messy and you might have to look through the closing statement to determine the proper allocation of payments related to property taxes and who possibly couldn't have a benefit for a deduction related to it based on the agreement for the closing statement. Caution, you must look at your real estate tax bill to decide if any deductible items charges such as those listed earlier are included in the bill. So if your tax and authority or lender doesn't furnish you a copy of your real estate tax bill, ask for it. So prepayments of next year's property taxes only taxes paid in 2022 and assessed prior to 2023 can be deducted for 2022. So notice we're kind of have a cashed based system here for the most part and cashed based systems are actually more manipulable than accrual based systems but they're easier to track. So if you have the cash flow, you might say, hey, look, I earned more money this year than I'm gonna earn next year for whatever reason. If that were the case, why don't I just prepay a bunch of these expenses? Why don't I just pay for my property taxes for the next 10 years this year because I happened to earn a lot of money this year or something and the government doesn't want you to let you do that. So they're gonna limit the amount of prepayment of the property taxes. So if you get a bright idea of I'm gonna prepay stuff then you gotta make sure and say am I able to prepay this or is the tax code gonna explicitly say which they often do? No, we're not gonna let you prepay a massive amount of your expenses because it's manipulative of the cutoff and whatnot. So state or local law determines whether and when a property tax is assessed which is generally when the taxpayer becomes liable for the property tax imposed. So refunds and rebates. If you received a refund or rebate in 2022 of real estate taxes you paid in 2022, reduce your deduction by the amount of the refund or rebate. If you received a refund or rebate in 2022 of real estate taxes you paid in an earlier year don't reduce your deduction by this amount. Instead you must include the refund or rebate in income on schedule one form 1040 line AC if you deducted the real estate taxes in the earlier year and the deduction reduced your tax. So this is the same kind of concept we saw before with like the state tax refund for example if you got a benefit last year for something that you deducted and then they refunded it this year then what are you gonna do? Are you gonna go back to last year and fix the fact that you deducted something that you didn't really pay for because they refunded it to you or it would be easier and oftentimes the way to go the way the code lets you go is to do it this year meaning if I got a benefit for it last year I'm gonna include it in income this year. So it has a tax burden to me this year because I included it in income because I got a tax benefit from it last year kind of improperly because I got a deduction which I didn't really shouldn't really have gotten because I didn't really pay that but that's the cash based kind of problem again with this cash based system because I paid it but then I got refunded.