By Benecia Beyer
The IRS is providing a new online tool to help individual taxpayers determine whether they might benefit by electing to deduct their state and local sales taxes. It's an interactive tool on the IRS government website that is designed to help make it easier for taxpayers to figure their taxes. (Did you know that the IRS is trying hard to reduce the taxpayer burden - that's an official quote from the IRS website !)
Taxpayers who itemize their deductions on Schedule A of the Form 1040 have the option of deducting the amount of state and local sales tax paid instead of deducting their state and local income taxes paid. Taxpayers can not take a deduction for both sales and income tax.
A new tax law enacted in late December reinstated the optional deduction for state and local sales taxes. Because of this late enactment date, the IRS previously announced that it would not begin processing returns claiming the sales tax deduction until Feb. 3.
To use the Sales Tax Calculator, taxpayers input their adjusted gross income, number of exemptions and zip code. The IRS estimates most taxpayers will get an answer in less than five minutes using the new tool.
The calculator is annonymous. Taxpayers do not need to enter their name or any other identifying information. To calculate what your sales tax deduction would be, you can use either the actual amounts paid or use sales tax tables that allow you to factor in the exact sales paid on certain specified items, such as a car, boat or material to build a house.
Comments