Tax Deduction on Sales Tax
By Scott Sumerford on Monday, December 3rd, 2007 :: 6:00 pmCategory: Watching Out 4 You
This year, you can benefit from doing your own taxes and save some money. The Internal Revenue Service announced it is extending the provision of the 2004 American Jobs Creation Bill through 2007. The Act gives individual taxpayers, who itemize deductions when they file their taxes, the ability to deduct their state and local sales tax or income tax. If you live in one of the states that do not have income tax, you can still deduct your state sales tax.
You may think spending more time on your taxes would be as enjoyable as spending more time in an operating room, but the IRS has made calculating your deductions relatively easy. The online Sales Tax Deduction Calculator accounts for your income level and number of exemptions. This tool only takes a few minutes to find the allotted amount you can deduct on your taxes in lieu of saving your receipts.
Additionally, individuals can deduct sales tax paid on: (a) a motor vehicle up to tax amount paid at the general sales tax rate; and (b) an aircraft, boat, home, or substantial renovation of a home up to the general sales tax rate. In the instance a tax is added to a purchase other than the state and local tax, the additional tax is not deductible.
Though calculating your taxes is an arduous task, calculating your state sales tax deduction is quite simple. It can also save you money this coming tax season. With a larger tax return, you could repay access credit card debt from this holiday season.
Author Bio: Scott Sumerford has several years of experience working in the financial industry and has written a myriad of articles on various financial matters. Read more about how Credit Solutions offers a viable alternative to debt consolidation.
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