Taxes

gstlouis · 01-10-2005, 06:51 PM

I heard this morning on the news, while getting ready for work, that for federal income taxes you can either deduct state income tax paid or sales tax (i.e. you can deduct the sales tax of the titan). Does anyone know if this is the case? I am hoping for a big refund this year.

Greg

TXTitan05 · 01-10-2005, 07:07 PM

In Texas, we do not have a state income tax, so I am not sure. However, it is true that we will be able to deduct sales tax for 2004.

*Titan2004* · 01-10-2005, 08:00 PM

Why would anyone be able to deduct sales tax they paid on their Titans? Never heard such a thing. I know that holds true for very expensive rigs like Hummers etc, unless I heard wrong....what's up? Is this a state to state thing?

TXTitan05 · 01-10-2005, 08:03 PM

The American Jobs Creation Act 2004

http://www.irs.gov/newsroom/article/...132383,00.html

*Titan Critter* · 01-10-2005, 08:33 PM

you can deduct your state income tax from your federal tax form. i think you have to itemize on the 1040 to do this. i did it last year for the first time. i don't think you can deduct taxes paid on autos. might be different if you are a small business and the vehicle is a business expense.

scr38 · 01-10-2005, 09:50 PM

If you live in a state without a State Income Tax (like here in Texas) you can (now) deduct the sales tax.

BigRedTitan · 01-10-2005, 09:54 PM

I was using TurboTax online last night. It has the sales tax deduction. No business restriction or anything like that. So, yes, you can deduct the sales tax you paid on your Titan and sales tax you paid at the store, if you kept your receipts. If you don't have your receipts, it does have an auto calculator that you can put your local sales tax rate into and it will figure kind of an average amount for you. It came up with a $812 deduction for me PLUS the deduction for my Titan.

As for the state income tax, I believe you can do the same with it. I am in Texas and we don't have state income tax, so I don't know for sure.

ARTSBEST · 01-11-2005, 09:20 AM

Is NOW deductible on the one's Federal return. You can use EITHER your state income taxes OR your total state sales tax number. NOT BOTH, however. Which ever one is HIGHER. This was to help those who can NOT
deduct their state income taxes due to the fact their respective state has NO state income tax.

*Titan2004* · 01-11-2005, 03:22 PM

Can there possibly be anyone who paid more in sales tax than income tax? Doubtful. If you live in a state that has no state income tax I can see it. Otherwise I don't see the point. Am I missing something important here? It looks like you have to choice of deduction sales or income taxes...not both.

Nuckle · 01-11-2005, 04:18 PM

It still wont help me. I fall under the standard deductions plan and have not been able to figure out how to change it. My house is paid for so with no interest to deduct all the other things don't add up to being enough. I will try again this year as always so there is still hope.

Nuck

Bill_n · 01-11-2005, 04:54 PM

Quote:

Originally Posted by Titan2004

Can there possibly be anyone who paid more in sales tax than income tax? Doubtful. If you live in a state that has no state income tax I can see it. Otherwise I don't see the point. Am I missing something important here? It looks like you have to choice of deduction sales or income taxes...not both.

Both are deductible ....

But sales tax is only deductible of you itemize ...

And you must ... of course ... do all of the record-keeping necessary to prove it in an audit ....

Unless you have some large purchases ... it is rarely worth the time and trouble to keep track of the state sales tax that you pay ....

But ... if you're really anal about making sure that you don't give the government a single dime more than you have to ....

Both state sales tax paid ... and state income tax witheld ... have been deductible since I filed my first return when Jimmy Carter was President ....

You do not have to itemize to have the state income tax witheld reduce your AGI ... but you do have to itemize ... and pass a "%" test to have sales taxes deductible ....

Perhaps you have the option of "choosing" if you file a short form ....

gstlouis · 01-12-2005, 05:13 PM

Thanks for the input. The large purchase was the Titan. I don't have the paper work in front of me, but I am pretty sure I paid more in tax on the Titan than income tax last year. I had to pay state, city and RTD (rapid transit) tax when I bought it, then I get plates and get nailed again.

Greg

homer · 01-12-2005, 05:52 PM

In NH we don't have a state income tax but they stiff us in other ways. We have to register our cars every year, and the fee can be quite high on new vehicles, it drops with each year as the vehicle ages but takes 4 or 5 years to bottom out. The registration fee (tax) is deductible every year and makes for a nice write off. I paid over $1000 in fees on my Titan this year.

**CaliforniaTitan** · 01-13-2005, 10:06 AM

Quote:

Originally Posted by Titan2004

Can there possibly be anyone who paid more in sales tax than income tax? Doubtful. If you live in a state that has no state income tax I can see it. Otherwise I don't see the point. Am I missing something important here? It looks like you have to choice of deduction sales or income taxes...not both.

I think we did..haven't calculated it yet but we bought 2 Titans in '04 so I think ours may be over what we paid in State.

Edit: Wow, actually just thought about it..we bought 5 cars last year...

I might be getting one heck of a break this tax year.

Chris

TriKKy · 01-13-2005, 10:25 AM

Is this on top of the standard deduction?

I believe to get this you have to itemize and unless you paid more in either state income or sales tax, it is still better to just take the standard deduction. Am I wrong? If I am that would make me quite happy.