FYI - New Fed Tax Option

[ylexot]

I just heard about this from my coworkers, so I decided to look it up.

IRS Issues Optional Sales Tax Tables

The American Jobs Creation Act of 2004 authorized the sales tax deduction as an option for those who itemize deductions, letting them choose between deductions for state and local income or sales taxes. Taxpayers will indicate by a checkbox on line 5 of Schedule A which type of tax they’re claiming. The law provides this choice for Tax Years 2004 and 2005 only.

 

[Ken King]

"The tax law authorizing this optional deduction for state and local sales tax instead of state and local income tax was enacted too late in the year to include the tables in the tax instruction books."

I'm going to read the instruction but as we have no local sales tax and MD has a sales tax rate of 5% why would I right that off versus what they take at a greater rate from my income?

 

[ylexot]

True. When I originally heard about it, I thought they said it was a MD state tax change which might make it worth it. I later found out it was Federal, but forgot to think about how it might affect my taxes. You're right. It will probably be a bad idea to go that route for most people.