Save Receipts - Deduct Taxes

[jeffrey]

The next time you go shopping, hold on to your receipts. It will make it a lot easier to return those leopard-skin pants you purchased in a moment of midlife madness. And even if you decide to keep the pants, the receipt may help you lower your tax bill.

A corporate tax bill approved by Congress last week gives taxpayers who itemize the choice of deducting state and local sales taxes or state income taxes on their federal tax returns. The bill is expected to be signed by President Bush.

The biggest beneficiaries of the change will be residents of states with no income tax. While states without an income tax typically raise more of their revenue from sales taxes, residents haven't been allowed to deduct those taxes. Supporters of the new deduction say that's unfair.

Starting this year, residents of those states will be permitted to add sales taxes to other deductions, such as charitable contributions and interest on home mortgages... [read more at usatoday.com

You can also read our complete article on this subject: Deduct Sales Tax On Your IRS Federal Taxes