Posted on 01/28/2007 1:07:34 AM PST by Dallas59
Just doing my Taxes through Turbo Tax and the thing says I can get a standard deduction on State Sales Tax plus a $30 deduction for Telephone long distance use. I don't have to provide reciepts on the State Sales Tax refund.
Texas is at %6.25:
Do I qualify for the sales tax deduction?
Eligibility requirements
To qualify for this deduction, you must:
- Itemize deductions on Schedule A.
- Have records for the actual amount of sales tax you paid.
Note: If you don't have records of the sales tax you paid, you can enter your combined state and local sales tax rate and TurboTax will calculate the deduction. (If you don't know your state and local sales tax rates, TurboTax will calculate your deduction based on just your home state sales tax rate, which might result in a smaller deduction.)
Limitations of this deduction
- You can't deduct sales tax for alternative minimum tax (AMT) purposes.
Special circumstances or exceptions
- You can't deduct more than the general sales tax rate for your state and locality, even if you paid additional sales tax for an item.
- If you have purchase receipts, you may include the sales taxes on food, clothing, medical supplies, and motor vehicles even if the tax rate was less than the general sales tax.
- If you're using purchase receipts to calculate your deduction, be sure to subtract the amount of sales tax on anything you returned for refund.
TELEPHONE TAX REFUND
Telephone Tax Refund
If you paid for long-distance telephone service at any time since February 28, 2003, you also paid a federal excise tax. The IRS is refunding all federal excise tax paid on long-distance telephone charges billed between March 1, 2003 and July 31, 2006 in the form of a credit.
There are two ways to determine the amount of your credit.
The easiest way is to claim the standard credit set by the IRS. The credit amount is based on the number of personal exemptions you claim on your tax return. This method lets you take a credit of:
- $30 if you claim one exemption - $40 if you claim two exemptions - $50 if you claim three exemptions - $60 if you claim four or more exemptions
The alternate way is to claim the actual amount of federal excise tax you paid on long-distance billed between March 1, 2003 and July 31, 2006. You'll need to gather all your long-distance bills and add the excise tax charged.
The standard deduction formula for the sales tax is probably fine unless you have any high ticket items for which you paid sales tax. The software can step you through those calculations.
This was on the 2005 Turbo Tax. This was put in place because some states (like Texas) don't have a state income tax, which is deductible, and this was seen as unfair to non income tax states. Everyone who files is eligible if you meet the criteria.
I guess filling for Katrina relief is out of the question...I wonder if Jesse J. and Cindy would back me up?
Scroll down a bit to find articles about the phone tax.
http://www.freerepublic.com/focus/search?m=all;o=time;s=phone%20tax
Unless you make too much money and fall into the AMT category of filth.
Is that a sarcastic "Wow" ?
$612 seems like very little to me. You would pay more Sales Tax than that by spending just $10K on taxable items during the year. Saving receipts might be a worthwhile strategy for you for 2007, eh ? Then you could deduct the full amount of sales taxes actually paid.
I'm in CA, so I have both an Income Tax and Sales Tax. My Sales Tax paid is probably around $2K, but my State Income Tax is around $6K, so the Sales Tax Deduction is useless to me.
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