Sales Tax Deduction

[wnytaxman]

For those of you who have purchased a new RV in 2014 there is good news. Both the House and the Senate have passed the Tax Extenders bill which will reinstate most of the tax breaks that expired at the end of 2013. This is assuming the President signs the bill, which he is expected to do. Included in these breaks is the ability to deduct sales tax paid. If you itemize your deductions and you paid more in sales tax than you paid in state income taxes, you will be able to deduct those sales taxes.

[CLIFFTALL]

I'm sure that will be good news for those who qualify.
Thanks for posting.

[dons2346]

Taxman, was the entire sales tax deduction thing going away?

I live in a state that doesn't have income tax and I have always deducted any sales tax I pay from my federal return

[wnytaxman]

Don, the deduction was supposed to be gone for 2014 along with a whole bunch of other provisions. Congress decided to bring them back after the election and I'm not really sure what was the political motivation for waiting, but wait is what they did.

If you lived in a state like Texas or Florida which had no income tax, you would have no state tax deduction if the sales tax deduction had not been brought back. It isn't just the additional sales tax like on RV's and cars, but also the sales tax deduction from the sales tax tables. It would hurt those in no income tax states but now you will get some relief. Remember you can deduct either the tax from the table or your actual tax paid if you can prove the amount you paid.

Ed

[dons2346]

Thanks Ed. We do save all our receipts that have sales tax on them and always come out better than using the tables. Hard part is figuring the sales tax on fuel when we buy so much in different states and them having different rates

[wnytaxman]

As an update, the President did sign the law so we have sales tax as a deduction again.

[paz]

Did the deduction get extended only for 2014, or did it go beyond? Our new fiver isn't due in until early 2015.

[wnytaxman]

So far it's only for 2014. We're hopeful they will extend it, but as of now we are only looking at still having it in 2014. The original bill was for at least two years but Congress did not think they could get the White House to go along with more than the one year.

[the trainguy]

That's great news!
I bought a new pellet stove this past March.
Did they also extend the home energy improvements credit for 2014?
If so I have both deductions available!

[wnytaxman]

Originally Posted by the trainguy

That's great news!
I bought a new pellet stove this past March.
Did they also extend the home energy improvements credit for 2014?
If so I have both deductions available!

The energy credit got changed a lot a couple of years ago and now it is just $500 lifetime. Most of our client have taken that much years ago and no longer qualify. I haven't really looked at that provision to see if it is still there, but due to its minimal effect I would imagine that it is still there. I see you are a fellow NY'er which means you are probably paying a pretty substantial income tax also so I would be surprised if the sales tax on a pellet stove and the sales tax table would exceed your income tax paid.

[dons2346]

What about a solar installation on an RV? Some say the credit is deductible and some say not

[wnytaxman]

Don, the solar is a credit and I have not checked to see if it is included in the Tax Extenders law, but if it is, the solar does qualify for the tax credit on an RV. Remember this is a credit, not a deduction. It will go directly against the tax you owe. The requirement is that the solar is on a home, either a primary or a second home. RV qualifies as a second home so you should be good for the credit.

[paz]

Originally Posted by wnytaxman

So far it's only for 2014. We're hopeful they will extend it, but as of now we are only looking at still having it in 2014. The original bill was for at least two years but Congress did not think they could get the White House to go along with more than the one year.

Thanks for the info. At least the tax on the new truck that we are picking up today will be deductible for sure, and there is still hope for the fiver that comes in after the first of the year.

[Krafty52k]

Ed, Thanks for keeping us informed...this is the second time you have helped your fellow WNY RVers!