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Old 02-22-2011, 07:02 PM
CPA
 
Join Date: Jan 2010
Posts: 2
Additional Tax Credits and Deductions in 2010!

I think you omitted to mention the following to credits and deductions for 2010!

1. The Retirement Savings Contributions Credit:
This is designed to help low and moderate income taxpayers to save for retirement. Individuals with incomes of up to $27,750 and married couples with joint incomes of up to $55,500 may qualify for a credit of up to $1,000 per person.

2. Sales tax:

Taxpayers can deduct sales tax paid in 2010 if the amount was greater than the state and local income taxes paid by the Taxpayer. In other words, Taxpayers may get to choose to deduct sales tax paid in 2010 if the amount was greater than the state and local income taxes you paid.

But, if the taxpayer did not keep any sales tax receipts, then the taxpayer is permitted to use the IRS' sales tax deduction estimator. Now, per the IRS, if a taxpayer claims the sales tax amount from the IRS tables, the taxpayer can still add in tax paid on vehicles or boats purchased during the year, (except to the extent the sales tax rate on them is more than the general sales tax rate).

If on the other hand, a taxpayer resides in a state with a high income tax, like California the taxpayer will benefit considerably more by claiming the state and local income taxes rather than sales taxes. But, if the taxpayer resides in a state with no income tax, like Florida, the taxpayer would clearly benefit more by electing to take the sales tax deduction when the taxpayer chooses to itemize.



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