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Employee
January 3, 2025
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Deduct Expense in year it was paid or year it applies to?

  • January 3, 2025
  • 2 replies
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I have a few expenses where the year I am paying is different from the year it applies to and not sure which year I should pay apply the expense to. Below are my two examples:

 

Business Travel: Paid for the tickets in 2024 for travel happening in early 2025

State Taxes: Paid my Q42024 payment in 2025

    Best answer by Bsch4477

    Business travel expense paid in 2024 is reported on your 2024 return. Estimated tax for 2024 paid in January 2025 is applied to your 2024 return. 

    2 replies

    Bsch4477Answer
    Employee
    January 3, 2025

    Business travel expense paid in 2024 is reported on your 2024 return. Estimated tax for 2024 paid in January 2025 is applied to your 2024 return. 

    rjs
    Employee
    January 3, 2025

    The fourth-quarter state estimated tax payment gets a little tricky. The payment gets applied to your 2024 state tax return as a payment, together with the payments for the earlier quarters. But if you claim an itemized deduction for state income tax on your federal tax return, you claim the deduction on your federal tax return for the year that you actually paid it, which is 2025.