Posted by Margaret_FL on 3/14/07 6:35am
Msg #179815

Sales Tax Deduction

Did anyone claim the sales tax deduction. It really added up for me. We purchased 2 new cars and a RV. The added refund amounted to 1103.00. There is a calculator on the IRS website if you did not make any major purchases and you did not save receipts.

Reply by hcampersFL on 3/14/07 7:00am
Msg #179819

Margaret I think that is for Florida and other states that don't have "personal" income tax. I to save all my receipts as well and have done so for the last 2 years. It really has made a difference.

Reply by WDMD on 3/14/07 7:36am
Msg #179825

"Margaret I think that is for Florida and other states that don't have "personal" income tax. I to save all my receipts as well and have done so for the last 2 years. It really has made a difference."

Anybody can take the sales tax deduction if they want to. Does not matter where you live to be eligible to take it.

Reply by hcampersFL on 3/14/07 8:21am
Msg #179830

From the IRS web-site


Sales Tax Deduction Option

FS-2005-6, January 2005

The American Jobs Creation Act of 2004 gives taxpayers the option to claim state and local sales taxes instead of state and local income taxes when they itemize deductions. This option is available for the 2004 and 2005 returns only.

IRS Publication 600, Optional State Sales Tax Tables, helps taxpayers determine their sales tax deduction amount in lieu of saving their receipts throughout the year. Taxpayers use their income level and number of exemptions to find the sales tax amount for their state. The table instructions explain how to add an amount for local sales taxes if appropriate.

Taxpayers also may add to the table amount any sales taxes paid on:

A motor vehicle, but only up to the amount of tax paid at the general sales tax rate; and
An aircraft, boat, home (including mobile or prefabricated), or home building materials, if the tax rate is the same as the general sales tax rate.
For example, the State of Washington has a motor vehicle sales tax of 0.3 percent in addition to the state and local sales tax. A Washington state resident who purchased a new car could add the tax paid at the general sales tax rate to the table amount, but not the 0.3 percent motor vehicle sales tax paid.

Taxpayers will claim the deduction on line 5 of Schedule A, checking a box to indicate whether the amount represents sales tax or income tax.

While this deduction will mainly benefit taxpayers with a state or local sales tax but no income tax — in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming — it may give a larger deduction to any taxpayer who paid more in sales taxes than income taxes. For example, you may have bought a new car, boosting your sales tax total, or claimed tax credits, lowering your state income tax.

Taxpayers may download Pub. 600 from the IRS Web site, or order it by calling (toll-free) 1-800-TAX-FORM (1-800-829-3676). The IRS has mailed Pub. 600 to all taxpayers who received a Form 1040 tax package.

Reply by Linda_H/FL on 3/14/07 8:45am
Msg #179832

Re: From the IRS web-site

"The American Jobs Creation Act of 2004 gives taxpayers the option to claim state and local sales taxes instead of state and local income taxes when they itemize deductions. This option is available for the 2004 and 2005 returns only."

Was this extended to cover 2006 returns?

Reply by WDMD on 3/14/07 9:00am
Msg #179835

Re: From the IRS web-site

Not quite sure why you posted that from the IRS website hcampersfl, but if you read it it says the same thing I said, that any taxpayer can take it. And yes it was extended for 2006.

Reply by Linda_H/FL on 3/14/07 9:05am
Msg #179837

Re: Thanks WDMD...heh..can you tell

I haven't done my taxes yet??..<G>

Reply by hcampersFL on 3/14/07 9:46am
Msg #179840

Re: Thanks WDMD...heh..can you tell

I posted it so people could read and do research instead of taking the word of people like me. ;o)

My point is I don't think you can claim both state income taxes and state sales taxes. Am I wrong?

Reply by WDMD on 3/14/07 10:04am
Msg #179844

Re: Thanks WDMD...heh..can you tell

"I posted it so people could read and do research instead of taking the word of people like me. ;o)

My point is I don't think you can claim both state income taxes and state sales taxes. Am I wrong?"

Yes, you are correct. There is a checkbox on Sch A where you declare which deduction you are taking.

Reply by Margaret_FL on 3/14/07 10:06am
Msg #179846

Re: Thanks WDMD...heh..can you tell

It may not be for all states but I used Tax Cut and it was one of the deductions allowed for Florida, It really made a difference because of the large purchases we made in 2006. I bought a 2006 Jeep Liberty and my husband bought a Hummer, we also bought a travel trailer for camping for $14,000

Reply by Sharon Taylor on 3/14/07 12:06pm
Msg #179863

Only available if you itemize deductions

It's not fair, but it's only available if you itemize deductions. Since my DH and I don't have enough deductions for a Schedule A, we lose out on this benefit. The standard deduction is more than we would be able to put on a Schedule A.

Reply by MikeC/NY on 3/14/07 3:14pm
Msg #179894

Re: Only available if you itemize deductions

That's the way it used to be years ago when they allowed you to take both state/local taxes and sales taxes as a deduction - only available if you itemized. I guess the logic is "here, we'll allow you to deduct this much without question - if you want more, you have to itemize (so we can check and nail your hide to a tree)..."

At least now they're allowing you to take either, which is a small victory for the taxpayer. Now if they would just do something about that Alternative Minimum Tax...