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Important info for Corvette buyers (not spam)
I just received some good news from my accountant. There is a new allowance
in the Tax code for people living in states that do not have a state income tax. It allows a deduction for sales taxes paid. Particularly large item purchases. Say, like a car, like a Corvette? Check with your tax preparer for details. Rob 78 & 96 Coupes (Red of course) |
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#2
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Actually, that option is available to ALL taxpayers in ALL states who
itemize deductions. A taxpayer can choose to deduct either state and local income taxes paid OR sales taxes paid. Obviously, for those who live in states which do not assess income taxes, this is a no-brainer -- it's a new extra deduction. The law states that a taxpayer may deduct actual sales taxes paid during the year as evidenced by records and receipts, or the taxpayer may choose to use an estimated amount taken from an IRS table based upon family size and income. This law change came into being as of October 23, 2004, when the American Jobs Creation Act was enacted. Since this enactment was late in the year, many taxpayers won't have sales tax receipts from before October 23, 2004 (or before becoming aware of the law change), and will consequently use the table to determine the maximum deduction allowable. For states that assess a sales tax on a car or boat purchase, this sales tax amount is something that would figure into the total when adding up sales tax amounts from retained receipts. But extra good news is the fact that sales taxes on the purchase of a car and/or a boat can be ADDED to the amount from the IRS table to maximize the deduction. Even if you pay state income tax, it would worth your while to determine your sales tax deduction -- the amount may be larger than the amount of state income taxes you pay and therefore lower your tax bill. If your state has no income tax, congratulations on your new, EXTRA deduction! If you bought a Corvette (or other car(s) or boat(s)) during 2004 and paid sales taxes on the purchase, this new law provision could save you some bucks on your taxes. Happy, less-taxing motoring in your 'Vette! David 2000 Coupe, Millennium Yellow "Scubabix" > wrote in message ... >I just received some good news from my accountant. There is a new >allowance in the Tax code for people living in states that do not have a >state income tax. It allows a deduction for sales taxes paid. >Particularly large item purchases. Say, like a car, like a Corvette? >Check with your tax preparer for details. > > Rob > 78 & 96 Coupes (Red of course) > |
#3
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Actually, that option is available to ALL taxpayers in ALL states who
itemize deductions. A taxpayer can choose to deduct either state and local income taxes paid OR sales taxes paid. Obviously, for those who live in states which do not assess income taxes, this is a no-brainer -- it's a new extra deduction. The law states that a taxpayer may deduct actual sales taxes paid during the year as evidenced by records and receipts, or the taxpayer may choose to use an estimated amount taken from an IRS table based upon family size and income. This law change came into being as of October 23, 2004, when the American Jobs Creation Act was enacted. Since this enactment was late in the year, many taxpayers won't have sales tax receipts from before October 23, 2004 (or before becoming aware of the law change), and will consequently use the table to determine the maximum deduction allowable. For states that assess a sales tax on a car or boat purchase, this sales tax amount is something that would figure into the total when adding up sales tax amounts from retained receipts. But extra good news is the fact that sales taxes on the purchase of a car and/or a boat can be ADDED to the amount from the IRS table to maximize the deduction. Even if you pay state income tax, it would worth your while to determine your sales tax deduction -- the amount may be larger than the amount of state income taxes you pay and therefore lower your tax bill. If your state has no income tax, congratulations on your new, EXTRA deduction! If you bought a Corvette (or other car(s) or boat(s)) during 2004 and paid sales taxes on the purchase, this new law provision could save you some bucks on your taxes. Happy, less-taxing motoring in your 'Vette! David 2000 Coupe, Millennium Yellow "Scubabix" > wrote in message ... >I just received some good news from my accountant. There is a new >allowance in the Tax code for people living in states that do not have a >state income tax. It allows a deduction for sales taxes paid. >Particularly large item purchases. Say, like a car, like a Corvette? >Check with your tax preparer for details. > > Rob > 78 & 96 Coupes (Red of course) > |
#4
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Thanks for the extra info.
Rob "Okiemoose" > wrote in message news:Kwqxd.15237$F25.1654@okepread07... > Actually, that option is available to ALL taxpayers in ALL states who > itemize deductions. A taxpayer can choose to deduct either state and > local income taxes paid OR sales taxes paid. Obviously, for those who > live in states which do not assess income taxes, this is a no-brainer -- > it's a new extra deduction. > > The law states that a taxpayer may deduct actual sales taxes paid during > the year as evidenced by records and receipts, or the taxpayer may choose > to use an estimated amount taken from an IRS table based upon family size > and income. > > This law change came into being as of October 23, 2004, when the American > Jobs Creation Act was enacted. Since this enactment was late in the year, > many taxpayers won't have sales tax receipts from before October 23, 2004 > (or before becoming aware of the law change), and will consequently use > the table to determine the maximum deduction allowable. > > For states that assess a sales tax on a car or boat purchase, this sales > tax amount is something that would figure into the total when adding up > sales tax amounts from retained receipts. But extra good news is the fact > that sales taxes on the purchase of a car and/or a boat can be ADDED to > the amount from the IRS table to maximize the deduction. > > Even if you pay state income tax, it would worth your while to determine > your sales tax deduction -- the amount may be larger than the amount of > state income taxes you pay and therefore lower your tax bill. If your > state has no income tax, congratulations on your new, EXTRA deduction! > > If you bought a Corvette (or other car(s) or boat(s)) during 2004 and paid > sales taxes on the purchase, this new law provision could save you some > bucks on your taxes. > > Happy, less-taxing motoring in your 'Vette! > > David > 2000 Coupe, Millennium Yellow > > "Scubabix" > wrote in message > ... >>I just received some good news from my accountant. There is a new >>allowance in the Tax code for people living in states that do not have a >>state income tax. It allows a deduction for sales taxes paid. >>Particularly large item purchases. Say, like a car, like a Corvette? >>Check with your tax preparer for details. >> >> Rob >> 78 & 96 Coupes (Red of course) >> > > |
#5
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Thanks for the extra info.
Rob "Okiemoose" > wrote in message news:Kwqxd.15237$F25.1654@okepread07... > Actually, that option is available to ALL taxpayers in ALL states who > itemize deductions. A taxpayer can choose to deduct either state and > local income taxes paid OR sales taxes paid. Obviously, for those who > live in states which do not assess income taxes, this is a no-brainer -- > it's a new extra deduction. > > The law states that a taxpayer may deduct actual sales taxes paid during > the year as evidenced by records and receipts, or the taxpayer may choose > to use an estimated amount taken from an IRS table based upon family size > and income. > > This law change came into being as of October 23, 2004, when the American > Jobs Creation Act was enacted. Since this enactment was late in the year, > many taxpayers won't have sales tax receipts from before October 23, 2004 > (or before becoming aware of the law change), and will consequently use > the table to determine the maximum deduction allowable. > > For states that assess a sales tax on a car or boat purchase, this sales > tax amount is something that would figure into the total when adding up > sales tax amounts from retained receipts. But extra good news is the fact > that sales taxes on the purchase of a car and/or a boat can be ADDED to > the amount from the IRS table to maximize the deduction. > > Even if you pay state income tax, it would worth your while to determine > your sales tax deduction -- the amount may be larger than the amount of > state income taxes you pay and therefore lower your tax bill. If your > state has no income tax, congratulations on your new, EXTRA deduction! > > If you bought a Corvette (or other car(s) or boat(s)) during 2004 and paid > sales taxes on the purchase, this new law provision could save you some > bucks on your taxes. > > Happy, less-taxing motoring in your 'Vette! > > David > 2000 Coupe, Millennium Yellow > > "Scubabix" > wrote in message > ... >>I just received some good news from my accountant. There is a new >>allowance in the Tax code for people living in states that do not have a >>state income tax. It allows a deduction for sales taxes paid. >>Particularly large item purchases. Say, like a car, like a Corvette? >>Check with your tax preparer for details. >> >> Rob >> 78 & 96 Coupes (Red of course) >> > > |
#6
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(I know this thread is a little off topic...)
Does this new rule work for leases as well? In MD, they calculate sales tax on the negotiated price of vehicle, rather than a monthly sales tax on t he lease pmt. -Stan "Scubabix" > wrote in message news > Thanks for the extra info. > > Rob > > "Okiemoose" > wrote in message > news:Kwqxd.15237$F25.1654@okepread07... >> Actually, that option is available to ALL taxpayers in ALL states who >> itemize deductions. A taxpayer can choose to deduct either state and >> local income taxes paid OR sales taxes paid. Obviously, for those who >> live in states which do not assess income taxes, this is a no-brainer -- >> it's a new extra deduction. >> >> The law states that a taxpayer may deduct actual sales taxes paid during >> the year as evidenced by records and receipts, or the taxpayer may choose >> to use an estimated amount taken from an IRS table based upon family size >> and income. >> >> This law change came into being as of October 23, 2004, when the American >> Jobs Creation Act was enacted. Since this enactment was late in the >> year, many taxpayers won't have sales tax receipts from before October >> 23, 2004 (or before becoming aware of the law change), and will >> consequently use the table to determine the maximum deduction allowable. >> >> For states that assess a sales tax on a car or boat purchase, this sales >> tax amount is something that would figure into the total when adding up >> sales tax amounts from retained receipts. But extra good news is the >> fact that sales taxes on the purchase of a car and/or a boat can be ADDED >> to the amount from the IRS table to maximize the deduction. >> >> Even if you pay state income tax, it would worth your while to determine >> your sales tax deduction -- the amount may be larger than the amount of >> state income taxes you pay and therefore lower your tax bill. If your >> state has no income tax, congratulations on your new, EXTRA deduction! >> >> If you bought a Corvette (or other car(s) or boat(s)) during 2004 and >> paid sales taxes on the purchase, this new law provision could save you >> some bucks on your taxes. >> >> Happy, less-taxing motoring in your 'Vette! >> >> David >> 2000 Coupe, Millennium Yellow >> >> "Scubabix" > wrote in message >> ... >>>I just received some good news from my accountant. There is a new >>>allowance in the Tax code for people living in states that do not have a >>>state income tax. It allows a deduction for sales taxes paid. >>>Particularly large item purchases. Say, like a car, like a Corvette? >>>Check with your tax preparer for details. >>> >>> Rob >>> 78 & 96 Coupes (Red of course) >>> >> >> > > |
#7
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(I know this thread is a little off topic...)
Does this new rule work for leases as well? In MD, they calculate sales tax on the negotiated price of vehicle, rather than a monthly sales tax on t he lease pmt. -Stan "Scubabix" > wrote in message news > Thanks for the extra info. > > Rob > > "Okiemoose" > wrote in message > news:Kwqxd.15237$F25.1654@okepread07... >> Actually, that option is available to ALL taxpayers in ALL states who >> itemize deductions. A taxpayer can choose to deduct either state and >> local income taxes paid OR sales taxes paid. Obviously, for those who >> live in states which do not assess income taxes, this is a no-brainer -- >> it's a new extra deduction. >> >> The law states that a taxpayer may deduct actual sales taxes paid during >> the year as evidenced by records and receipts, or the taxpayer may choose >> to use an estimated amount taken from an IRS table based upon family size >> and income. >> >> This law change came into being as of October 23, 2004, when the American >> Jobs Creation Act was enacted. Since this enactment was late in the >> year, many taxpayers won't have sales tax receipts from before October >> 23, 2004 (or before becoming aware of the law change), and will >> consequently use the table to determine the maximum deduction allowable. >> >> For states that assess a sales tax on a car or boat purchase, this sales >> tax amount is something that would figure into the total when adding up >> sales tax amounts from retained receipts. But extra good news is the >> fact that sales taxes on the purchase of a car and/or a boat can be ADDED >> to the amount from the IRS table to maximize the deduction. >> >> Even if you pay state income tax, it would worth your while to determine >> your sales tax deduction -- the amount may be larger than the amount of >> state income taxes you pay and therefore lower your tax bill. If your >> state has no income tax, congratulations on your new, EXTRA deduction! >> >> If you bought a Corvette (or other car(s) or boat(s)) during 2004 and >> paid sales taxes on the purchase, this new law provision could save you >> some bucks on your taxes. >> >> Happy, less-taxing motoring in your 'Vette! >> >> David >> 2000 Coupe, Millennium Yellow >> >> "Scubabix" > wrote in message >> ... >>>I just received some good news from my accountant. There is a new >>>allowance in the Tax code for people living in states that do not have a >>>state income tax. It allows a deduction for sales taxes paid. >>>Particularly large item purchases. Say, like a car, like a Corvette? >>>Check with your tax preparer for details. >>> >>> Rob >>> 78 & 96 Coupes (Red of course) >>> >> >> > > |
#8
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The short answer is yes. State sales taxes paid with respect to a vehicle
lease are deductible in the same manner as if the vehicle was purchased (generally as a Form 1040 Schedule A itemized deduction). If the vehicle is a business vehicle (whether leased or purchased), your deduction would instead be a business expense deduction based upon the percentage of business use of the vehicle (usually deducted on Form 1040 Schedule C or C-EZ). If the vehicle is not used 100% for business (be sure to keep a log of business use), the deduction is split between Schedule C and Schedule A. For example, let's say the state sales taxes paid on the vehicle (leased or purchased) amount to $100. You use the vehicle for business 7,500 miles of the 10,000 total miles the vehicle is used during the year 2004. This equates to 75% business use (and 25% personal use). You would have a personal, Schedule A sales tax deduction of $25 (25% of $100) and a business sales tax deduction of $75 (75% of $100). If there is no business use of the vehicle, then the total sales taxes paid on the vehicle are a Schedule A deduction. Hope this helps you! David 2000 coupe, MY "sbright" > wrote in message ... > (I know this thread is a little off topic...) > > Does this new rule work for leases as well? In MD, they calculate sales > tax on the negotiated price of vehicle, rather than a monthly sales tax on > t he lease pmt. > > -Stan > > > "Scubabix" > wrote in message > news >> Thanks for the extra info. >> >> Rob >> >> "Okiemoose" > wrote in message >> news:Kwqxd.15237$F25.1654@okepread07... >>> Actually, that option is available to ALL taxpayers in ALL states who >>> itemize deductions. A taxpayer can choose to deduct either state and >>> local income taxes paid OR sales taxes paid. Obviously, for those who >>> live in states which do not assess income taxes, this is a no-brainer -- >>> it's a new extra deduction. >>> >>> The law states that a taxpayer may deduct actual sales taxes paid during >>> the year as evidenced by records and receipts, or the taxpayer may >>> choose to use an estimated amount taken from an IRS table based upon >>> family size and income. >>> >>> This law change came into being as of October 23, 2004, when the >>> American Jobs Creation Act was enacted. Since this enactment was late >>> in the year, many taxpayers won't have sales tax receipts from before >>> October 23, 2004 (or before becoming aware of the law change), and will >>> consequently use the table to determine the maximum deduction allowable. >>> >>> For states that assess a sales tax on a car or boat purchase, this sales >>> tax amount is something that would figure into the total when adding up >>> sales tax amounts from retained receipts. But extra good news is the >>> fact that sales taxes on the purchase of a car and/or a boat can be >>> ADDED to the amount from the IRS table to maximize the deduction. >>> >>> Even if you pay state income tax, it would worth your while to determine >>> your sales tax deduction -- the amount may be larger than the amount of >>> state income taxes you pay and therefore lower your tax bill. If your >>> state has no income tax, congratulations on your new, EXTRA deduction! >>> >>> If you bought a Corvette (or other car(s) or boat(s)) during 2004 and >>> paid sales taxes on the purchase, this new law provision could save you >>> some bucks on your taxes. >>> >>> Happy, less-taxing motoring in your 'Vette! >>> >>> David >>> 2000 Coupe, Millennium Yellow >>> >>> "Scubabix" > wrote in message >>> ... >>>>I just received some good news from my accountant. There is a new >>>>allowance in the Tax code for people living in states that do not have a >>>>state income tax. It allows a deduction for sales taxes paid. >>>>Particularly large item purchases. Say, like a car, like a Corvette? >>>>Check with your tax preparer for details. >>>> >>>> Rob >>>> 78 & 96 Coupes (Red of course) >>>> >>> >>> >> >> > > |
#9
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The short answer is yes. State sales taxes paid with respect to a vehicle
lease are deductible in the same manner as if the vehicle was purchased (generally as a Form 1040 Schedule A itemized deduction). If the vehicle is a business vehicle (whether leased or purchased), your deduction would instead be a business expense deduction based upon the percentage of business use of the vehicle (usually deducted on Form 1040 Schedule C or C-EZ). If the vehicle is not used 100% for business (be sure to keep a log of business use), the deduction is split between Schedule C and Schedule A. For example, let's say the state sales taxes paid on the vehicle (leased or purchased) amount to $100. You use the vehicle for business 7,500 miles of the 10,000 total miles the vehicle is used during the year 2004. This equates to 75% business use (and 25% personal use). You would have a personal, Schedule A sales tax deduction of $25 (25% of $100) and a business sales tax deduction of $75 (75% of $100). If there is no business use of the vehicle, then the total sales taxes paid on the vehicle are a Schedule A deduction. Hope this helps you! David 2000 coupe, MY "sbright" > wrote in message ... > (I know this thread is a little off topic...) > > Does this new rule work for leases as well? In MD, they calculate sales > tax on the negotiated price of vehicle, rather than a monthly sales tax on > t he lease pmt. > > -Stan > > > "Scubabix" > wrote in message > news >> Thanks for the extra info. >> >> Rob >> >> "Okiemoose" > wrote in message >> news:Kwqxd.15237$F25.1654@okepread07... >>> Actually, that option is available to ALL taxpayers in ALL states who >>> itemize deductions. A taxpayer can choose to deduct either state and >>> local income taxes paid OR sales taxes paid. Obviously, for those who >>> live in states which do not assess income taxes, this is a no-brainer -- >>> it's a new extra deduction. >>> >>> The law states that a taxpayer may deduct actual sales taxes paid during >>> the year as evidenced by records and receipts, or the taxpayer may >>> choose to use an estimated amount taken from an IRS table based upon >>> family size and income. >>> >>> This law change came into being as of October 23, 2004, when the >>> American Jobs Creation Act was enacted. Since this enactment was late >>> in the year, many taxpayers won't have sales tax receipts from before >>> October 23, 2004 (or before becoming aware of the law change), and will >>> consequently use the table to determine the maximum deduction allowable. >>> >>> For states that assess a sales tax on a car or boat purchase, this sales >>> tax amount is something that would figure into the total when adding up >>> sales tax amounts from retained receipts. But extra good news is the >>> fact that sales taxes on the purchase of a car and/or a boat can be >>> ADDED to the amount from the IRS table to maximize the deduction. >>> >>> Even if you pay state income tax, it would worth your while to determine >>> your sales tax deduction -- the amount may be larger than the amount of >>> state income taxes you pay and therefore lower your tax bill. If your >>> state has no income tax, congratulations on your new, EXTRA deduction! >>> >>> If you bought a Corvette (or other car(s) or boat(s)) during 2004 and >>> paid sales taxes on the purchase, this new law provision could save you >>> some bucks on your taxes. >>> >>> Happy, less-taxing motoring in your 'Vette! >>> >>> David >>> 2000 Coupe, Millennium Yellow >>> >>> "Scubabix" > wrote in message >>> ... >>>>I just received some good news from my accountant. There is a new >>>>allowance in the Tax code for people living in states that do not have a >>>>state income tax. It allows a deduction for sales taxes paid. >>>>Particularly large item purchases. Say, like a car, like a Corvette? >>>>Check with your tax preparer for details. >>>> >>>> Rob >>>> 78 & 96 Coupes (Red of course) >>>> >>> >>> >> >> > > |
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