I am doing my taxes and I have Overriding Royalty Interests. Can anyone list some or all the possible deductions I can claim off my Gross income (not including State tax withheld)?
So far, I already know I should take:
Depletion 15% of gross
But what else? How about any of these below?
On my SPUR overriding royalty check I see these :
-Compression
-Gathering
-Transportation
-Severance tax
-Processors tax
-State withholding tax
SPUR Energy simply grouped everything into “Owner Deductions” and “Owner Taxes” that were subtracted from my monthly Overriding Royalty checks.
(New Mexico is where the oil and gas is drilled)
You can deduct the expenses charged by Spur (excepting NM state income tax). The costs as one figure and severance tax as a second figure. A lot of companies combine the severance taxes and state income taxes so you will need to separate.
Thank you very much. It seems on my 1099Misc from SPUR, on page 2 is 1) “State Withholding” , and 2) “Sev/Prod Taxes” and 3) “Deducts” So I think that means I don’t need to manually separate the taxes. It looks like they have done this for me.
So I will let my CPA decide where these go on the 1040, but I think Sev/Prod Taxes and Deducts go on Schedule E
3 Taxes? (My wells have “Plant Products” which triggers “NM Processors Tax”…
For anyone reading this, My SPUR monthly paystubs therefore show 3 taxes: Severance Tax, NM Processors Tax, and State Withholding Tax. So it seems Severance Tax and NM Processors Tax are grouped and totaled on my 1099misc under “Sev/Prod Taxes” while State Withholding Tax is totaled under “State Withholding”
I think this is correct.
Thank you @TennisDaze I hope this helps anyone doing their taxes. REMEMBER to take all the deductions you are allowed, and double check with your CPA.