Warning

 

Close

Confirm Action

Are you sure you wish to do this?

Confirm Cancel
BCM
User Panel

Site Notices
Posted: 2/6/2006 12:39:13 PM EDT
Can anyone explain the easiest way to deduct any sales tax I paid throughout 2005 on my income tax return? Is this something I can deduct on my federal taxes or is it only a state deduction?

I don't have all of my receipts, but I do have all of my bank statements that show all of my purchases throughout the year. Can I use these to calculate the amount of sales tax I paid throughout the year?

Michigan's sales tax rate is 6%
Link Posted: 2/6/2006 12:49:26 PM EDT
[#1]
There is a standard deduction you can take for state and local sales tax IF you do not already deduct your state income tax from your federal taxes.  Any program like TurboTax or TaxCut will give you the standard amount based on your local tax rate.  If you have large purchases like a car that you paid taxes on you can add that to the top of the standard deduction for sales tax.  You can deduct item-by-item if you have paid more than the standard deduction but you have to be able to prove it all and that's a lot more to mess with.
Link Posted: 2/6/2006 4:28:00 PM EDT
[#2]
Thanks. Any other suggestions?
Link Posted: 2/6/2006 4:46:21 PM EDT
[#3]
The odds of your sales tax exceeding your state income tax are exceptionally small. And you can only take one or the other. Also you must itemize, ie file a schedule A.

It will almost certainly be better to just take your state income tax deduction.

I am not sure how you figure bank statements show you purchases but if you are talking about using your checking account statements, I don't think the IRS is going to go for it.  Next year save your receipts if you figure it will be that much.  IIRC you can keep a record in a notebook as well but you would have to check into that.

Close Join Our Mail List to Stay Up To Date! Win a FREE Membership!

Sign up for the ARFCOM weekly newsletter and be entered to win a free ARFCOM membership. One new winner* is announced every week!

You will receive an email every Friday morning featuring the latest chatter from the hottest topics, breaking news surrounding legislation, as well as exclusive deals only available to ARFCOM email subscribers.


By signing up you agree to our User Agreement. *Must have a registered ARFCOM account to win.
Top Top