Which types of taxes are generally deductible for individuals?

The correct answer is that individuals can generally deduct state and local taxes, real property taxes, and foreign income taxes. This is grounded in tax law that allows taxpayers to itemize deductions on their federal income tax returns.

State and local taxes include income taxes paid to your state and city, and individuals can deduct either sales taxes or state income taxes, but not both. The deduction for real property taxes applies to taxes paid on real estate owned by the taxpayer, which is also a significant aspect of deductions available to individuals. Additionally, foreign income taxes can often be deducted, particularly for those who may have foreign investments or live abroad.

This combination of state and local taxes, along with real property taxes and certain foreign taxes, is designed to give individuals a break on taxes that they have borne directly at various levels of government. It's important to note that this is subject to certain limits set by the IRS, particularly under the cap established by the Tax Cuts and Jobs Act of 2017 on state and local tax (SALT) deductions. But, overall, these categories represent the primary types of taxes that are generally deductible for individuals when they are itemizing deductions on their tax returns.