In January 2018, Pam, a calendar year cash basis taxpayer, made an estimated state income tax payment for 2017. The payment is deductible in 2017.

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According to the cash method of accounting, deductions are allowed in the year the payment is actually made. Therefore, since Pam made the estimated state income tax payment in January 2018, it cannot be deducted on her 2017 tax return.

In January 2018, Pam, a Calendar Year Cash Basis Taxpayer