For those who bought in '04...

[jjs]

I am not a CPA, nor presenting that I have all the info, but for those of us who bought in 2004 and do our own taxes, don't forget about the state sales tax deduction.

For more info, see www.irs.gov for Publication 600.

Just might help quite a bit.

[C-Man]

Great for us in Texas and Florida. The tax break is for only the states that do not pay income tax. I believe that's 5 or 6 states.

[jjs]

Yeah, helps us a bit, but I think it is available to everyone (although I can't see how this deduction would be worth more than the income tax deductions in other states).

Oh well, in any case, just wanted to remind people of this.



"New for 2004, you can elect to deduct state and local
general sales taxes instead of state and local income taxes
Tables as an itemized deduction on Schedule A (Form 1040). You
cannot deduct both. Generally, to figure your state and
local general sales tax deduction, you can use either your For use in preparing actual expenses or the Optional State Sales Tax Tables
contained in this publication."

[JonW]

Originally Posted by C-Man

Great for us in Texas and Florida. The tax break is for only the states that do not pay income tax. I believe that's 5 or 6 states.

Somehow this seems a bit unfair. If you already have a state income tax, that usually would be worth more, thus you wouldn't get this tax break. If you have no state income tax, then this is a bonus deduction. Something stinks here...

[C-Man]

The logic is that people can write off state income taxes from their federal income taxes. Previously, people in states that do not have a state income tax did not get to write anything off. Since states that do not have income taxes rely on sales taxes for income, this year and next year people in states that do not have income tax will be able to write off their sales tax.

You don't need to save receipts, they will have a lookup table based on gross income. Some things like a car purchase can be added to the lookup table. At least this is what I remember from the newspaper article.