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Year End Help: Missed Tax Deductions

Several years back, the man who had been running the IRS revealed that he suspected an incredible number of tax payers overpaid their taxes every year by missing just one of many tax deductions that most of the general public doesn’t know about.

This week we will touch on a few of those deductions so that you can cut your taxes by claiming many of the breaks you are entitled to including some you might have forgotten about or never even knew about.

First up, State Sales Tax.

Even though all taxpayers are eligible for this write-off, it’s a good idea mainly for individuals who live in states that don’t impose revenue tax. You have to pick whether or not to deduct state and local income taxes or state and local sales taxes. For the majority of residents in income tax states, the income tax paid is often bigger than the sales tax, therefore the income tax deduction is in reality a much better deal.

The Internal Revenue Service has tables that indicate just how much people of different states can deduct, depending on his or her revenue and state and local sales tax rates. However, these tables may not but the end all, be all. Let’s say you purchased an automobile or boat, you’re able to add the sales tax you paid for the total amount shown on the IRS table for your state.

The same thing goes for virtually any homebuilding materials you bought. These additional products are very easy to miss, but higher price items might make the sales tax write-off an even better deal even though you may reside in a state which has an income tax. The IRS website features a calculator on it to assist you figure the tax deduction.