This may be the last year that taxpayers who itemize get to choose between deducting their state income taxes or their state sales taxes on their federal tax return. Unless Congress acts, the either-or-state-tax break will expire at the end of the year. In the meantime, if you plan to deduct your sales taxes, buying a big ticket item like a car or a boat before the end of the year can substantially boost your deduction.
For most taxpayers, the state income tax provides a larger deduction. But for residents of states that don't have an income tax, such as Texas or Florida, the sales tax deduction is an easy choice.
You can save your receipts or use the IRS's state-specific tables to estimate your sales tax based on your family's size and income. In either case, you can add the sales tax for major purchases like a car or boat to boost your tally.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Just think, if you buy an energy-efficient hybrid car before the end of the year, you'll qualify a sales tax deduction and an energy tax credit of up to $3,000, depending on the make and model. But shop carefully. The tax credit for the most popular Toyota hybrids has already been exhausted.
Return to: 15 Year-End Tax Moves
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Premium Tax Credit: Are You Eligible For This Health Insurance Tax Break?Tax Credits The tax credit can help qualifying individuals pay for coverage from the Affordable Care Act’s health insurance marketplace.
-
FSA Contribution Limits Are Higher for 2025FSA A flexible spending account allows you to build tax-free savings for certain medical expenses.
-
Florida Tax Deadline Extension: What You Need to KnowTax Relief The IRS extended federal tax return file time due to severe storms.
-
IRS: Here’s How to Recover Your Tax Records After a Natural DisasterTax Records Your tax documents can help you get federal relief faster, the IRS says.
-
Voters Approve New Veteran Property Tax ReliefTax Relief Thanks to the election, some Veterans will soon see expanded property tax exemptions.
-
Nevada Approves Diaper Tax Relief Amid Childcare CrisisTax Relief Nevada voters have expanded sales tax relief to diapers. But are prices still too high?
-
Earned Income Tax Credit (EITC) 2024: How Much Will You Get?Tax Credits The refundable amount for workers with or without children is slightly higher this year. Here’s what you need to know.
-
Five Cities With the Lowest Property Tax in the U.S.Property Tax Property taxes are ultra-low in these popular metro areas, but is housing affordable?
