2004 Year End Tax Move: State Sales Tax Deduction

[saving...@gmail.com]

State Sales Tax Deductions: A new law was enacted this year that allows
you to choose between deducting your state and local taxes or your
sales tax if you itemize your tax return. For the seven states that
don't have state taxes (Florida, Nevada, South Dakota, Tennessee,
Texas, Washington and Wyoming), this is a no brainer. For everyone
else, you'll have to compare the two in order to know which is to your
benefit.

Since this law was enacted late in the year, most people won't have
their sales tax receipts for the entire year. To help with this
situation, the government will be releasing tax tables based on income,
number of dependants, filing status and state of residence that you can
use in place of receipts. You'll have the choice to use your own
receipts or the tables.

This new deduction can especially benefit taxpayers that purchased a
car or boat this year (or plan to before the end of the year). The law
provides that taxpayers that purchased big ticket items such as cars
and boats (possibly with more high priced items added later) can deduct
the actual sales tax paid on the purchase in addition to the amount
listed in the IRS tables. If you don't have your receipt for your auto
purchase, go to the dealership where you purchased the vehicle to get a
duplicate.

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More information on the state sales tax deduction:
http://www.savingadvice.com/forums/showthread.php?t=2784

[is30...@gmail.com]

This is a really good one since I just bought a car on May 2004. This
is not my first time doing taxes, but I didn't buy a car previous years
either. I want to know how you go about using a state sales tax
deduction (not counting the car, i know where the receipt is for that
one!) if I had thrown most of my receipts away?

[saving...@gmail.com]

You can find the sales tax tables that the government has supplied
here:

http://www.savingadvice.com/forums/showthread.php?t=4053

Just add on your car sales tax to the appropriate sales tax table
amount.