Sales Taxes

Sales Taxes may be deducted on your federal income tax return if you itemize deductions.  Actually, you may deduct the greater of your state income taxes or your sales tax paid, but not both.

The sales tax deduction is only available for 2005 through 2011.  For 2012 and later years, the sales tax deduction will disappear unless Congress extends this tax break.
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You can chose between two methods of calculating you sales tax deduction:  1)  Actual Sales Taxes–just keep all your receipts and total the amount of sales tax you paid during the year or 2)  Optional Sales Tax Tables–use the amount in the sales tax calculator provided by the IRS plus the sales tax on purchase of vehicles, boats, aircraft, and addition or renovation of a home.

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