Don’t Forget to Deduct Your Sales Taxes
8 November 2006Don’t Mess With Taxes has a post that you’ll be interested if you live in a state without an income tax (Texas, Washington, Alaska, Florida, South Dakota, Wyoming, and Nevada). It points out that the IRS is reviving an old deduction for people who pay sales tax, so it will apply to your 2006 returns. You get a choice between deducting state income tax or state sales tax – so you’ll probably only want to use it if you’re in a state without an income tax (then again, if you bought a giant yacht, you may come out better this way, too). The downside? You have to itemize, and can’t take the standard deduction. But many people do that anyway, especially if they own a home. And as Don’t Mess With Taxes points out, a big chunk of residents of those states simply forget to do it. That’s free money that you’re wasting, and the couple of extra lines you fill out on your tax return are well worth it.
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One Response to “Don’t Forget to Deduct Your Sales Taxes”
November 20th, 2006 at 10:28 pm
you forgot Tennessee has no state income tax