Answers to your Tax Season Questions

I underpaid my 1999 taxes by $300 and paid the amount in 2000. Can I use this as a deduction on the 2000 tax return? If so, where is the deduction entered? B.F via e-mail.

Your question doesn't specify whether you are referring to a payment of federal or state taxes. If you paid an extra $300 in federal taxes last year there is no deduction allowed on your federal return for this amount. Some states allow deductions for federal taxes paid and some do not. Since you didn't specify in which state you live, you'll just have to check the tax return in your state to see if a deduction is allowed.  

If the amount you paid represents an additional amount of state income taxes, you are allowed to claim this as a deduction on your federal tax return if you itemize your deductions on Schedule A. The $300 gets added to the "State and local income taxes" amount on line five of the federal Schedule A.  

Can I take a deduction for homeowners' association dues? B.F. via e-mail.

No, there is no deduction allowed for homeowners' association dues, assuming the fee is assessed on your own residence. If you pay association dues on property that you rent to someone else, the fee is considered a deductible expense on your Schedule E where you report the income from the rental property.  

Can I deduct the unused portion of my pre-tax health care spending account from work or do I loose it entirely? B.F via e-mail..

Silly you! You've already deducted the spending account. Look back at the question you asked - this is a pre-tax account. Pre-tax means the amount is deducted from your income before you pay tax on your income. You are not entitled to deduct again any portion of this amount, whether you used it for medical expenses or not. Consider it a form of health insurance that you didn't have to take advantage of because you were healthy all year - be thankful for little favors!  

Can I deduct 1997 and 1998 property taxes that I paid in 2000? J.J. via e-mail.

Sure - go right ahead. As long as the property taxes were assessed on property that you owned at the time of the assessment, and the property was not used for business (the business portion of property taxes gets reported elsewhere on your tax return), and as long as the tax is based on the assessed value of the property, you can take the deduction. It matters not that you are paying for prior years.  

Report your property tax deduction on Schedule A with your other itemized deductions, on line 6 for "Real estate taxes." If you can't itemize deductions, you lose the deduction for property taxes.   

In 1998 and 1999, I contributed $2000 to a Roth IRA account.  Due to the poor stock investments that I made, the account value is currently less than $1000.  To make matters worse, I see no chance that the stocks will ever recover. Do you see any way in which I could use these losses to my advantage? E.G. via e-mail.

I'm sorry to say one disadvantage of the Roth IRA is that you have already paid income tax on the money you deposited in the account, but you don't get to see a tax benefit from losses the account suffers. (Of course one benefit of the account is that you don't have to pay income taxes on the gains that the account earns.)  

At least with a traditional IRA account or a 401(k) plan, you would have the small solace that when you withdraw the money, there will be less on which you have to pay income tax. Not so with the Roth account. With luck your future investments in the account will grow and eventually you will recoup your losses.