State and Local Sales Tax Deduction
Monday March 14, 2005
The IRS allows you to deduct the higher of your state and local income taxes or your state and local sales taxes. Both are itemized deductions on your Form 1040 Schedule A. You can take the higher of the two figures, but not both combined together. Because this is a new provision in the tax code, the IRS has issued additional guidance for how to compute the sales tax deduction in IRS Notice 2005-31 (PDF document).
Hi,
Could you tell me what the status is on this deduction for 2006? Last I heard, it was not available, but may be passed into law.
Regards,
Pam