WASHINGTON
— The Internal Revenue Service is providing a new online tool to help individual
taxpayers determine whether they might benefit by electing to deduct their state
and local general sales taxes.
“The Sales Tax Calculator
is another interactive tool on the IRS.gov web site designed to help make it easier
for taxpayers to figure their taxes,” said IRS Commissioner Mark W. Everson.
Taxpayers
who itemize deductions on Schedule A of the Form 1040 in 2006 have the option
of deducting the amount of state and local sales taxes paid instead of deducting
their state and local income taxes paid. Taxpayers cannot take a deduction for
both sales and income taxes.
New tax law enacted in late
December reinstated the optional deduction for state and local sales taxes. Because
of this late enactment date, the IRS previously announced that it would not begin
processing returns claiming the sales tax deduction until Feb. 3.
To
use the Sales Tax Calculator, taxpayers input their adjusted gross income, number
of exemptions and zip code. The IRS estimates most taxpayers will get an answer
in less than five minutes using the new tool.
The calculator
is anonymous. Taxpayers do not need to enter their name, Social Security number
or any other identifying information. The calculator is another in a series of
steps the IRS is taking to reduce taxpayer burden.
As an
alternate to the online sales tax calculator, taxpayers can use the worksheet
in Publication 600, State and Local General Sales Tax, posted on IRS.gov and mailed
in early January to about six million individuals who received the Form 1040 tax
package.
To calculate what their sales tax deduction would
be, taxpayers can use either the actual amounts paid or use sales tax tables that
allow them to factor in the exact sales taxes paid on certain specified items,
such as a car, boat or material to build a house.
To find
this tool, visit:Sales
Tax Deduction Calculator
IR-2007-19, Jan. 29, 2007
The Agency
The IRS is a bureau of the Department of the Treasury and one of the world's most
efficient tax administrators. In 2004, the IRS collected more than $2 trillion
in revenue and processed more than 224 million tax returns.
