Washington, D.C. - U.S. Congressman Kevin Brady (R-The Woodlands), author of the law providing taxpayers with the option to deduct their state and local sales taxes from their federal tax bill, encouraged taxpayers to watch their mailboxes for the “Optional State Sales Tax Tables” released today by the IRS on their website. 

 

“The tables published today by the IRS are taxpayer friendly and offer Texas families an opportunity to save even more on their federal income taxes this year.  The sales tax break stretches paychecks a little farther and helps keep more money in the family budget,” said Brady.

 

The Internal Revenue Service has made available on its Web site (www.irs.gov) Publication 600, “Optional State Sales Tax Tables”, which taxpayers may use for their 2004 returns. The IRS also will send Pub. 600 to all taxpayers who get a Form 1040 tax package in the next few weeks.  

 

According to the charts published today, a Texas family of four with an income between $30,000-$40,000 will be eligible to deduct $730 from their itemized federal tax return.  In addition to this base deduction, the taxpayer can add on the local sales tax paid by using an IRS worksheet included with the tables.  Taxpayers also may also add to the table amount any sales taxes paid on a motor vehicle, a boat, home (including mobile or prefabricated), or home building materials.  The tables give taxpayers a sales tax deduction amount as an alternative to saving their receipts throughout the year and tabulating the amount actually paid.

 

In a release today, IRS Commissioner Mark W. Everson stated, “Taxpayers should check these tables to see if they’re entitled to a larger sales tax deduction than a state income tax deduction."  While this deduction will mainly benefit taxpayers with a state or local sales tax but no income tax – in Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming – it may give a larger deduction to any taxpayer who paid more in sales taxes than income taxes.

 

Congressman Brady’s sales tax deductibility provision was signed into law by the President as a part of the American Jobs Creation Act.  For more information about the sales tax deduction log onto: www.house.gov/brady or call 936-441-5700.