| Being an experienced taxpayer doesn't necessarily | | | | of deducting sales taxes. Mostly, only people who |
| mean that you already know a lot about filing taxes | | | | have experience filing taxes before 1986 still believe in |
| and the rules and procedures applicable to your | | | | this tax myth. 1986 was the last year that anyone |
| specific circumstance. Because the tax code | | | | could deduct some sales taxes for purchases. |
| undergoes revisions and updates almost yearly and | | | | However, today, some states have somehow |
| there are specific codes for nearly every individual | | | | permitted this kind of policy to take effect once more. |
| situation, it's nearly impossible to be totally updated with | | | | Starting in 2004 and then also allowed in 2006 and |
| all these changes. On top of this, knowing that what | | | | 2007, people were authorized to deduct their sales |
| you think is true is not anymore true or that it was | | | | taxes from either their state taxes or their federal |
| never true in the first place can be both painful and | | | | income taxes. One important stipulation of this policy is |
| stressful. Because of this, many blindly follow some tax | | | | that people can only make the deduction on one type |
| myths and continue to file their tax returns without | | | | of tax, and not on both. Wyoming, Alaska, Washington, |
| realizing that they are already throwing away money. | | | | Florida, Texas, South Dakota, and Nevada allow this |
| The worst part is that they run into serious IRS | | | | deduction and citizens are truly grateful of this move. |
| problems as a result of not being properly informed. | | | | You may want to check on the status of this law |
| It is a common assumption for people to automatically | | | | every year just to make sure that you avoid a |
| file for a joint tax return when they get married. What | | | | potential IRS problem. |
| they don't realize is that they actually have the | | | | There is another myth that many people continue to |
| alternative of filing under ''married filing separately." In | | | | believe in, but only because it was once an actual law |
| most occasions, filing under this is more costly than | | | | and it's no longer in effect now. At a certain point in |
| filing a joint tax return. But in special cases, this | | | | time, anyone aged 55 years old and above may claim |
| alternative actually saves you money. For couples with | | | | $125,000 as exclusion from his/her taxes given that |
| two income earners, experts advise that you file using | | | | this was part of the gains from the sale of a house. |
| both ways and see which method is better and allows | | | | But this benefit can only be availed of once. Now, the |
| you to save money. You can actually make use of | | | | new law is actually much better than it used to be. The |
| one method now, and then the other option the next | | | | age requirement was deleted and the amount was |
| year, and still find yourself saving a considerable | | | | increased to $250,000 per person. So a married |
| amount of money for both occasions. It's also a good | | | | couple could feasibly exclude up to $500,000 from |
| idea to do this every year as during that period, certain | | | | gains made on the sale of a house. They also made |
| characteristics of a person's tax responsibility changes. | | | | one more crucial change to the old law, you can take |
| Deciding on which option to take necessitates proper | | | | the exclusion every two years instead of just once in |
| communication with your spouse as doing otherwise | | | | your life. So every two years you can sell a house |
| may result to bigger IRS problems. | | | | and exclude up to $250,000 in gains from taxes. |
| There are still several questions regarding the validity | | | | |