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Post by pig on Apr 25, 2011 13:30:03 GMT -5
Has anyone taken the sales tax deduction? If so, how did it fare vs your standard or itemized deduction?
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Post by commentator on Apr 25, 2011 14:17:24 GMT -5
First, the sales tax deduction is only available to those who itemize. Generally, a taxpayer will itemize only if his/her total itemized deductions exceed the standard deduction for whatever filing status the taxpayer falls into.
Second, an itemizing taxpayer must choose between deducting either state and local sales taxes OR state and local income taxes. This is a year by year election so the taxpayer should elect which ever total is higher in a particular year.
Third, for the most part, only those taxpayers who live in a state that has no individual income tax will find that the state/local sales tax is larger.
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Post by pig on Apr 26, 2011 7:44:16 GMT -5
Yeah, I was aware of your first two points. Your third point was what I was looking for, thanks!
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Post by activeonlooker on Apr 26, 2011 16:39:25 GMT -5
While point 3 is a great point, if you live in a state with no income tax, yet work in a state with an income tax (such as live in WA and work in OR), take which ever gives you the best result.
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Post by pig on Apr 27, 2011 8:31:34 GMT -5
Yes, but that is a hell of a lot of paperwork to keep track of. You would have to keep all your receipts no?
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spartan7886
Familiar Member
Joined: Jan 7, 2011 14:04:22 GMT -5
Posts: 788 
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Post by spartan7886 on Apr 27, 2011 8:41:05 GMT -5
You can do it that way, but the IRS will also calculate a number for you based on your income and sales tax rate.
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Post by pig on Apr 27, 2011 8:56:02 GMT -5
I did not know that. So, does it work like a standard vs. itemized deduction choice? Meaning I would not have to keep any records if I took the "standard" sales figure?
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Taxman10
Senior Member
Joined: Dec 29, 2010 15:12:43 GMT -5
Posts: 3,455
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Post by Taxman10 on Apr 27, 2011 9:44:40 GMT -5
I did not know that. So, does it work like a standard vs. itemized deduction choice? Meaning I would not have to keep any records if I took the "standard" sales figure? correct |
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Post by pig on Apr 27, 2011 11:06:37 GMT -5
Thanks for the information!
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