PATH Act: State & Local Tax Sales DeductionMarch 29, 2016
Taxpayers in states with no income tax will be pleased to know that a valuable tax break has been made permanent.
Taxpayers will continue to enjoy several tax perks due to The Protecting Americans from Tax Hikes (PATH) Act of 2015, which extends and makes permanent many expiring credits and deductions. Regarding SALT, or state and local taxes, the PATH Act makes permanent a temporary break which allows an itemized deduction for state and local sales taxes, instead of state and local income taxes.
Do I have to retain all receipts documenting my sales tax paid in 2015?
Fortunately, you don’t need all your receipts documenting the sales tax you paid in 2015. You can use the IRS sales tax calculator which determines the deduction based on your income and the sales tax rates in your locale. Provided you have proper substantiation, you can add the tax you actually paid on certain major purchases (car, boat, etc.) to the calculated amount.
Download our eBook, “2015 PATH Act: What All Taxpayers Need to Know” for valuable planning tips when it comes to the SALT deduction.