Big Spenders

By: Alana Adams
By: Alana Adams

If you spent a lot of money in 2004, you might be able to thank Uncle Sam come tax time.

Congress passed a law in October that will allow you to deduct what you paid in sales tax last year. In Florida, when the price tag says $10, you will more than likely pay 6 to 10 cents more depending on where you live, but a new federal tax law will help put some of that change back in your wallet.

James Givens, a local tax consultant, says this will help anyone who pays taxes.

"The Congress on October 22, 2004 passed a law that will allow taxpayers to deduct state sales tax as we did prior to the Tax Reform Act of 1986."

You don't need to stockpile receipts from 2004 either to collect on this tax perk.

The IRS has tax tables online to determine how much you can receive based on your income. You can also calculate the local general sales tax rate online.

If you file a single return and are younger than 65 in 2004, and your income is more than $7,950, you could qualify for a sales tax exemption. For example, if you earn $20,000 to $30,000, you could get at least $509, but the break doesn't stop there.

"There's also an additional amount allowed for sales taxes paid in 2004 for big ticket items such as RVs, some cars, motorcycles, motor homes, SUVs, trucks, vans and some off-road vehicles."

So, before the taxing season rolls through your house, check out this new law to benefit from the money you spent in 2004.

For more information about optional state and local sales tax, go to the Internal Revenue Service website atwww. irs.gov and search for sales tax.


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