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Q: How much money are people expected to save?
A: The new sales tax deduction will give Washington state residents an average tax cut of $519 to $575 per year. The savings amount depends on 2004 earnings and the number of exemptions your family takes. (See the official IRS table below to learn how much your family can save.)
Q: Who can benefit from sales tax deductibility?
A: The deduction option is available to anyone who itemizes his or her returns. Economists predict more than 1,240,000 Washington taxpayers will utilize the new sales tax deduction.
Q: Do I have to save my receipts to claim the deduction?
A: No, you do not have to save your receipts to take advantage of the deduction.*
Q: What will sales tax deductibility mean for the state?
A: The estimated tax savings are expected to create between 2,000 and 3,000 new Washington jobs and save taxpayers more than $500 million per year.
Q: How much will my family save?
A: Washington state taxpayers who itemize deductions can determine the dollar amount of their 2004 state sales tax deduction by using the official Internal Revenue Service’s table below. (The complete table, including deduction amounts for incomes more than $120,000, is available online at http://www.irs.gov/pub/irs-pdf/p600.pdf)
This table allows families to calculate the amount of their deduction on Form 1040 Schedule A line 5. For example, a family of four with adjusted gross income (line 37 of form 1040) of $42,000 annually would be able to deduct at least $808.
IRS Washington State 2004 State Sales Tax Deduction Table
|
Income |
Exemptions |
|
At
least |
But less
than |
1 |
2 |
3 |
4 |
5 |
Over
5 |
|
$0 |
$20,000 |
389 |
439 |
471 |
496 |
516 |
543 |
|
$20,000 |
$30,000 |
500 |
564 |
605 |
636 |
662 |
696 |
|
$30,000 |
$40,000 |
574 |
647 |
694 |
729 |
758 |
797 |
|
$40,000 |
$50,000 |
637 |
717 |
769 |
808 |
840 |
883 |
|
$50,000 |
$60,000 |
694 |
780 |
836 |
879 |
913 |
960 |
|
$60,000 |
$70,000 |
744 |
837 |
896 |
942 |
978 |
1,029 |
|
$70,000 |
$80,000 |
791 |
890 |
953 |
1,001 |
1,040 |
1,093 |
|
$80,000 |
$90,000 |
834 |
937 |
1,004 |
1,054 |
1,095 |
1,151 |
|
$90,000 |
$100,000 |
875 |
983 |
1,052 |
1,105 |
1,148 |
1,206 |
|
$100,000 |
$120,000 |
929 |
1,043 |
1,116 |
1,172 |
1,217 |
1,279 |
*IMPORTANT NOTE: In addition to the deduction amounts specified in the table above, taxpayers can also deduct local sales tax, as well as state and local sales tax
paid on any IRS-specified “big-ticket items,” including motor vehicles, boats, and home building materials.
This information is provided as a general guide. If you have specific questions about filing your tax returns, please contact a tax professional or contact the IRS at (800)829-1040. |
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