taxes

Tax planning 2011: Smart moves to make now

Buy a car?
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Buy a car?

If you claim state sales taxes as an itemized deduction, you probably use the tables created by the Internal Revenue Service to find the amount to enter on Schedule A. There's a table for the 45 states and the District of Columbia that collect sales taxes, along with information to figure the local tax amount you may add to that total.

These tables are handy. The IRS also offers an online calculator, as do tax software programs. But don't shortchange yourself.

If you made a major purchase during the year, such as a car, boat, airplane, RV, off-road vehicle or even a mobile or prefabricated home, you can add the sales taxes paid on those items to the amount shown in the IRS tables.

If you are planning such a purchase, you might want to make it by Dec. 31 instead of putting it off into next year. The state sales tax itemized deduction is set to expire at the end of 2011.

Given budget concerns on Capitol Hill, it's possible that 2011 could be the last tax year this deduction is around.


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