Tax Tip of the Day: Sales Tax Deduction

Sales tax may be a deductible against your federal income taxes. This is an itemized deduction and is claimed on Schedule A. The sales tax deduction is available only for the years 2005 through 2011. For 2012 and later, the sales tax deduction will go away unless Congress extends this particular tax break. Individuals can deduct either state and local income taxes or sales taxes paid during the year. In other words, taxpayers will need to choose between these two deductions. Generally speaking, the deduction works best for people who live in a state with no income tax, or whose sales tax deduction is larger than their state income tax deduction.

Method 1: Actual Sales Tax Expenses. Keep all your receipts, and add up the total amount of sales tax you paid during the year. This method requires a tremendous amount of record keeping, but could result in a higher deduction.

Method 2. Optional Sales Tax Tables. Use the amount provided in the sales tax calculator provided by the IRS, plus sales taxes paid on

·the purchase or lease of a vehicle,

·the purchase of a boat or aircraft, or

·the purchase or substantial addition or renovation of a home.

Get tax tips right here every day through April 15—exclusively from Berrios & Associates, Inc. on Danshamptons.com! 

Berrios & Associates, Inc.
Main Client Support Phone Numbers
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www.berriosassoc.com

About Berrios & Associates, Inc.

Since 1999, Berrios & Associates, Inc. has been providing a distinctive mixture of leadership-knowledge, and customer service satisfying client needs in advisory, tax, and outsourcing. Serving a diverse client base from individuals and sole proprietors to private corporations with nationwide and international locations. In the domain of accounting firms, Berrios & Associates has engraved a distinctive business based on diverse solutions through the interpersonal relationship of corporate and personal tax, corporate back office support, and business growth advisory. The firm directs clients through their everyday operations to ensure they have the right business model in place to meet their business goals.


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