| In 2004, the internal revenue service added the option | | | | how to add in any applicable local taxes as well. |
| of deducting state and local sales tax on your 2004 | | | | What this means for filers who file a late 2006 tax |
| and 2005 federal tax return. This was in place of | | | | return is there is a deduction they may not be aware |
| taking the state income tax deduction. The enactment | | | | of. If you will file a late return, you need to be aware of |
| of this was helpful for people who reside in states that | | | | the extension of this tax deduction. When filing one of |
| do not withhold state income taxes. In the beginning, | | | | these prior year tax returns you can take this |
| this was only to affect 2004- 05 tax returns, however | | | | deduction on line five of schedule A and write in ST on |
| it was extended to the 2007-filing year. | | | | the dotted line to the left of it. |
| Tax Law Extends State Sales Tax Deduction 2006 | | | | Additional Local Deductions |
| Late passage of the Tax Relief and Health Care Act | | | | In addition to the state sales tax deduction, taxpayers |
| of 2006 prevented the tax tables from being available | | | | may also deduct local taxes paid on the following:o |
| in the 1040 tax instructions. Instead, the tables were | | | | Motor vehicle, limited only to the amount paid at the |
| made available on their website and six million copies | | | | general tax sales tax rateo Aircraft, boat, home, and in |
| were mailed out to filers across the country. | | | | some cases extensive renovations. |
| The IRS publication 600 will aid taxpayers in calculating | | | | Again, as long as the rate is at the general sales tax |
| the amount of their state sales tax so that they do not | | | | level. |
| have to keep every receipt for the year. This will also | | | | It is always a good idea to keep up with all the new |
| be a major help to those who were unaware that the | | | | and pertinent information governing your tax liability or |
| code was still in effect. The calculations are based on | | | | deductions. Anyone filing 2006 taxes online should be |
| income and number of exemptions claimed on the | | | | aware that some programs might not be up to speed |
| federal return. The publication will also tell taxpayers | | | | on last minute changes such as this. |