Section 164 (of the Internal Revenue Code)

Section 164 of the Internal Revenue Code allows taxpayers to deduct certain taxes they have paid from their total income when calculating their federal income tax. This includes state and local income taxes, property taxes, and certain sales taxes. However, there is a cap on the total deduction, which is currently $10,000 for individuals and married couples filing jointly. This section helps to reduce taxable income, potentially lowering the overall tax bill for those who itemize their deductions rather than taking the standard deduction.