Massachusetts generally follows the federal tax code. Almost anything that you can deduct on your federal tax return is also a write-off when it comes to your Massachusetts state income taxes, as well. However, the state also adds additional deductions and credits of its own. These include write-offs for commuting, education, rent, work on your house and even the ability to write off some of your Social Security tax.
Massachusetts lets you write off up to $750 per year in approved commuter expenses as a deduction from your state taxes after you take your first $150 out of pocket. For example, if you spend $1,000, $750 of it will be tax deductible, but if you spend $850, only $700 of it will be a write-off. You can't write off every commuting expense, though: You can deduct only money that you spend on EZPass tolls or monthly or weekly passes for the Massachusetts Valley Transit Authority. Married couples can each claim the $750 deduction.
You can deduct up to $3,000 in rent that you pay on an apartment for which you have a rental agreement. The deduction is based on 50 percent of your actual rent, so to be able to deduct the full $3,000 in rent, you need to actually pay $6,000 in rent. Married couples that file separate returns have a limited deduction of just $1,500 per person.
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Social Security Deduction
Your first $2,000 per year of Federal Insurance Contributions Act contributions to Medicare and Social Security are tax deductible under Massachusetts law. If you file a joint return, both you and your spouse can each write off $2,000. Taxpayers who do not have FICA contributions withheld can write off money paid for Self-Employment Tax or contributions to a Railroad Retirement plan.
Residential Property Deductions
Similar to federal law, Massachusetts offers deductions for the cost of installing both solar or wind generation systems. However, the state also offers additional deductions for expenditures related to your home. Massachusetts law allows you to claim a tax credit to help defray a portion of the cost of replacing and no longer operational cesspool or septic system. The state also offers a credit to help you defray the cost of removing lead paint from your house.
Massachusetts education deductions are much more generous than those allowed under federal law. You can write off all of the student loan interest that you pay as a deduction on your Massachusetts state income taxes. The state also allows you to deduct all of the college tuition that you pay for yourself, your spouse or your dependents that is in excess of 25 percent of your Massachusetts adjusted gross income.
- Philip Dardeno CPA: Massachusetts/Federal Tax Differences
- Massachusetts Department of Revenue: Commuter Deduction
- Massachusetts Department of Revenue: Rent Paid
- Massachusetts Department of Revenue: Social Security (FICA) and Medicare
- Massachusetts Department of Revenue: Residential Property Credits
- Massachusetts Department of Revenue: Education Related Deductions
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