Posted by Deborah Lewellen on 4/6/09 7:58am
Msg #283734

OverLooked Tax Deduction, check this out

http://www.policelink.com/finance/articles/102013-make-your-taxes-less-taxing-tips-and-tricks?page=4 I did a closing for a couple a couple weeks ago and they were talking about their taxes and how they deduct ALL their sales tax on everything, even groceries. I said well how do you do that, they said their tax man does it for them, they just submit all their reciepts.
My son sent me this email, and his tax person did huge deductions for him.
Don't for get Cars/Boats/RV, cycle, etc. other big ticket items too, TV's and Tax on charges for Services. Hubby is going to talk to our tax guy PDQ as there is just over a week left.

Reply by WDMD on 4/6/09 8:12am
Msg #283738

I know I would not want someone handing me a years worth of receipts to total up, only to find that state taxes witheld from pay is more. Someone else would have to take a couple of hours of their time to do those totals.

Reply by Sharon Taylor on 4/6/09 8:16am
Msg #283739

Only for those who itemize?

Last year when I called the IRS, I was told we could only take the sales tax deduction if we did Schedule D for itemized deductions. The standard deduction is more than our itemized deductions would be, and I couldn't find any way to take this deduction as an individual item.
My dad used to save every receipt and add them up at the end of the year. Actual sales tax paid is always a lot more than the standard allowance from the IRS table. One year dad was questioned about the high sales tax deduction, and he took his box full of receipts down to the IRS office and dumped them on the guy's desk. The agent looked at dad and grumped about the loose receipts. Dad said firmly, "I added them up. You can do the same." Y'know, that was the last time he was ever questioned about his sales tax deduction. LOL

Reply by WDMD on 4/6/09 9:17am
Msg #283745

Re: Only for those who itemize?

Yep, you need to itemize on Schedule A. Here in Maryland 9 1/2 times out of ten, if you are an employee, your state tax witheld from pay would be more than your sales taxes paid during the year.

Reply by Deborah Lewellen on 4/6/09 9:52am
Msg #283750

Re: Only for those who itemize?

Again, this is primarily for folks in NON-State Income tax. In Tennessee our sales tax is almost 10%, so you could see my point, since we titled 3 vehicles in our names last yr. the sales tax is pretty significant. And we do itemize. I don't see how in this business you couldn't itemize with all that we spend and have to deduct.

Reply by WDMD on 4/6/09 11:39am
Msg #283769

Re: Only for those who itemize?

"I don't see how in this business you couldn't itemize with all that we spend and have to deduct. "


Itemizing has nothing to do with self employed business expenses.

Reply by Glenn Strickler on 4/6/09 6:15pm
Msg #283839

Re: Only for those who itemize?

You are allowed to take whichever deduction is larger, income or sales.

Reply by WDMD on 4/6/09 7:02pm
Msg #283846

Re: Only for those who itemize?

'You are allowed to take whichever deduction is larger, income or sales."

You can take whichever one you want regardless. It's to your benefit to take the one that is larger.