Sales Tax Deductible

Physician's Money Digest, April15 2005, Volume 12, Issue 7

Tip:

If you paid more in sales taxes thanyou paid in state income taxes last year,you can opt to deduct the sales taxes onyour federal tax return. If you don'tknow how much you paid in sales taxes,use the IRS estimated sales tax tables atwww.irs.gov. You can deduct sales taxesor state income taxes, whichever is higher,but not both, which means if you livein a state that has no income tax, deductingsales taxes is a no-brainer. Ifyou're thinking about buying a big-ticketitem, doing it this year may makegood sense. The sales tax deduction willend after 2005, plus the IRS will let youadd the sales tax paid on a car or boat totheir estimated figures.