Boost Your Sales Tax Deductionitemize To individually state each item or article.
Frequently used in tax accounting, an itemized account or claim separately lists amounts that add up to the final sum of the total account on claim. get another chance to choose between deducting their state income taxes or their state sales taxes sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. on their federal return this year. Congress extended the either-or-state-tax break, which had expired last year, for two more years through 2009.
If you plan to deduct de·duct
v. de·duct·ed, de·duct·ing, de·ducts
1. To take away (a quantity) from another; subtract.
2. To derive by deduction; deduce.
v.intr. your sales taxes, buying a big-ticket item big-ticket item Managed care A popular term for an expensive therapeutic or diagnostic procedure such as a car or a boat before the end of the year can substantially boost your deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. . . And with the massive drop-off in car sales, you can find bargains galore -- assuming you have the cash or can get a car loan.
For most taxpayers, the state income tax provides a larger deduction. But for residents of states that don't have an income tax, such as Texas or Florida, the sales-tax deduction is an easy choice.
You can save your receipts or use the IRS's state-specific tables to estimate your sales tax based on your family's size and income. In either case, you can add the sales tax for major purchases such as a car or boat to boost your tally.
As part of the same legislation, Congress also extended two other popular tax breaks that expired last year. Teachers and aides can deduct up to $250 of out-of-pocket expenses out-of-pocket expenses n. moneys paid directly for necessary items by a contractor, trustee, executor, administrator or any person responsible to cover expenses not detailed by agreement. for classroom supplies, regardless of whether they itemize their deductions. And some families with incomes too high to claim the Hope or Lifetime Learning tax credits can deduct up to $4,000 in college expenses. Both tax breaks were extended through 2009.
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|Author:||Mary Beth Franklin, Senior Editor, Kiplinger's Personal Finance|
|Date:||Nov 20, 2008|
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