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Sales Tax


SWharton

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This is our first year as a full-timer with no state income tax. I am trying to figure out how to handle the Sales Tax deduction. The program asks where I was at the end of the year and assumes I was in that state all year. If I check off I lived in more than one place the program asks where I lived at the end of the year. Both answers are AZ though our domicile is TX.

Am I over analyzing this? Just go with the flow and let the program think I lived in AZ all year?

I would ask this on the HR Block community site but all my browsers stop me as they think the Community site is a security risk

Thanks

 

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In the past when I itemized, I've done it both ways. Some years I just said I was a resident of SD the whole year (even though I was traveling fulltime) and used their rate. Other years for reasons I don't remember I went to the trouble of documenting how many months I was physically in SD, CO, NM, TX, etc ; and used multiple sales tax rates proportionately.

Lately, with the increases in the standard deduction, it harder for most to utilize the itemized deductions. 

I would also point out that if you use Tx as your sales tax residence, its 6.25% plus whatever the local rate adds on top that. In AZ it would be 5.6% plus any local adder.

Jim

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OK, thanks for the insight. I did go through and figure out how many days we spent in each state thinking I would need to do the calculation that way and was floored when the program only asked me where I was in January and in December. I am thinking TX as a full year just to keep things in sync with our domicile. I didn't expect this deduction so I look at it as a bonus deduction.

This will be our last year for having deductions unless the law changes again.

 

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I would really think about this and consult a tax attorney.  As if you file AZ state taxes, there is a chance they could come after you to register everything with them and force you to change your domicile from TX.  I am full time and stay maybe a month or two at most in one spot.  My legal domicile is SD.  I never file any state taxes as SD does not have any.

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1 hour ago, SWharton said:

and was floored when the program only asked me where I was in January and in December.

Hmm, I'm only familiar with TurboTax, it asks "were you a resident of the state for the whole year?" If Yes you fill in their tax rate and you're done. If No, then it asks you to fill in durations and states and tax rates for as many states as you want to use.

Jim

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Just now, JRP said:

Hmm, I'm only familiar with TurboTax, it asks "where you the resident of the state for the whole year?" If Yes you fill in their tax rate and you're done. If No, then it asks you to fill in durations and states and tax rates for as many states as you want to use.

Are you talking about this years Turbo Tax? Everything has changed.

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Yes, I just did mine last week.  My perspective is from using their questionnaire option where leads you through the itemized deduction questions (including state sales taxes), even though for most of us, at the end it determines the standard deduction is better.

Jim

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I use Turbo Tax but really just use the forms, since they are the same year to year and we long ago ended up with standard deduction being the way to go.   The only thing I use the "easy step" for would be for Capital Gains, especially when I have some gains and some loses.

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1 hour ago, Barbaraok said:

I use Turbo Tax but really just use the forms, since they are the same year to year and we long ago ended up with standard deduction being the way to go.

We itemized for the past several years, but with the increase in standard deduction this year, there's no way we can beat it.  But, if you haven't already realized it, this year there are no personal exemptions which means that ~$8k of deductions aren't available any longer.  So with the standard deduction and no exemption our taxable income remains roughly the same.  The tax rate for us goes down by 3% but that's the only change we see.

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16 hours ago, SWharton said:

 

This is our first year as a full-timer with no state income tax. I am trying to figure out how to handle the Sales Tax deduction. The program asks where I was at the end of the year and assumes I was in that state all year. If I check off I lived in more than one place the program asks where I lived at the end of the year. Both answers are AZ though our domicile is TX.

Am I over analyzing this? Just go with the flow and let the program think I lived in AZ all year?

I would ask this on the HR Block community site but all my browsers stop me as they think the Community site is a security risk

Thanks

 

Yes, you are over analyzing it.  If you are a AZ resident then go with that.  

You may have traveled all year and only been in AZ briefly.  But say for example you purchased a new car while traveling in New Mexico.  You would have ended up registering it in AZ and paying the sales tax there.  If you are a AZ resident then file your taxes (Fed/State) just like you were sitting there all year in a sticknbrick.  At least that is the way we approach it.

Joe & Cindy

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I believe Kirk is correct, as long as you are below a certain income threshold.  

Our friend filed hers a couple weeks ago and got her refund deposited into her bank account about 10 days later using Turbo Tax.  We also use it.  For $39 it is pretty quick and easy.

Joe & Cindy

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Pulling 24' enclosed (Mini Cooper, Harley, 2 Kayaks)

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49 minutes ago, FL-JOE said:

I believe Kirk is correct, as long as you are below a certain income threshold.  

Our friend filed hers a couple weeks ago and got her refund deposited into her bank account about 10 days later using Turbo Tax.  We also use it.  For $39 it is pretty quick and easy.

I think the threshold is about $60,000 adjusted gross income for a single person.  I've been filing mine electronically for several years now at no charge.  I use FreeTaxUSA which I found through the IRS.gov website.  I think there is a small fee if you need to also file a State return.  They file it for you and this year I got a refund deposited into my bank account in four days.

Everybody wanna hear the truth, but everybody tell a lie.  Everybody wanna go to Heaven, but nobody want to die.  Albert King

 

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It is $66,000 AGI for married, filing jointly.

I stick with TurboTax because I use their "What-If" worksheets to plan out the coming year using various withdrawals from our IRAs  (RMD, RMD*2, RMD*3) to figure out what I will need to pay in quarterly taxes with the various withdrawals and what big expenditures we think we will need.   Big one this year was the new car.     I am always upset if I end up with a refund > than $200 - don't like giving my money for the government to use as float.   And we never get a refund, just use that amount to pay ahead on the upcoming year's taxes.  This year we paid $70 more than we owed - I'm not sure I can figure it any closer than that!

Barb & Dave O'Keeffe
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I have a South Dakota domicile, which has no state income tax, but all my income is from rentals in Calif. I file a Federal Tax Return and a Non Resident Calif Tax Return. CA does not tax my Soc Sec. because I am not a resident of CA. 

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On 2/18/2019 at 1:02 PM, SWharton said:

 

This is our first year as a full-timer with no state income tax. I am trying to figure out how to handle the Sales Tax deduction. The program asks where I was at the end of the year and assumes I was in that state all year. If I check off I lived in more than one place the program asks where I lived at the end of the year. Both answers are AZ though our domicile is TX.

Am I over analyzing this? Just go with the flow and let the program think I lived in AZ all year?

I would ask this on the HR Block community site but all my browsers stop me as they think the Community site is a security risk

Thanks

 

with the 24,000 deduction started this year itemized deductions didn't matter with me, the 24,000 was more then what I had figured for my deductions

Mark & Annette

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