| The 2005 tax season will be the last year that | | | | want to check and see if you used sales tax in your |
| taxpayers can exercise the option to deduct state and | | | | itemization on your prior tax return. This deduction |
| local general sales taxes on their itemized taxes, | | | | helps people who are living in a state that does not |
| although there is some legislation still open that may | | | | have taxable status. These states are Alaska, Florida, |
| allow this option to be used in future years. For the tax | | | | Texas, Wyoming, Washington, South Dakota, and |
| years 2004 and 2005, those who itemize have been | | | | Nevada. It also helps those with lower incomes and |
| given the opportunity to choose a deduction of either | | | | several dependents. |
| state and local income related taxes or their state and | | | | This sales tax ruling could actually give a taxpayer a |
| generalized local sales taxes by marking on the form | | | | larger deduction if more has been paid in sales tax |
| their choice. For now, you can consider the sales tax | | | | than in actual state income tax. If you have bought |
| deduction option as a useful adjunct, which will soon be | | | | cars or trucks in 2005, you will higher sales tax |
| used for the last time. If you fill out a late 2005 tax | | | | deductions or credits, which will then lower the state |
| return, you will still be able to use this deduction in | | | | income tax. You can claim some of the sales tax you |
| calculating your taxes. | | | | paid on high-end items but there are some items that |
| You are allowed to take this particular deduction only if | | | | will not be usable, such as big, flat screen televisions. |
| you are using a Schedule A and itemizing when you fill | | | | Taxpayers are allowed to claim the sales tax on |
| out your 2005 tax online. If you are using the EZ form | | | | mobile homes, RVs, homes and building materials, |
| or claiming only the standard deduction, you will not be | | | | trucks, cars, boats, and airplanes.o If a taxpayer |
| able to use this tax deduction. You are free to use the | | | | received refunds of any state or local sales tax in |
| sales tables that the IRS provides in Publication 600 to | | | | 2005, they should be sure that their deductions reflect |
| figure your 2005 taxes, or you can use the actual | | | | this.o If the state 2005 tax refund was for purchases |
| sales tax paid if you have the records and receipts to | | | | that were made in a prior year then the sales tax |
| back the claim. | | | | deductions are left intact.o If the refunds received |
| Many taxpayers prefer to use the convenience of the | | | | were because the sales tax reduced earlier state tax, |
| tables but this usually gives you a much smaller | | | | the refunded amount may have to be listed as income |
| amount than you are actually entitled to. You might | | | | in the 2005 tax form. |