Homestead mailing list

["Toni Hawryluk" <tonihawr AT msn.com>]

----- Original Message ----- From: Gene GeRue<mailto:genegerue AT ruralize.com> 

> >Oh well, I suppose we all have weeknesses.
> >
> Suppose? Are you really uncertain about that? Maturity may well begin when 
> one recognizes one's own flaws.

And how long after *that* does it take to be able
to join in the laughter while one's "foot is in one's own 
mouth" (or both feet sometimes in my case) ... sigh ...
>From tonihawr AT msn.com  Sun Nov 21 12:40:04 2004
Return-Path: <tonihawr AT msn.com>
X-Original-To: homestead AT lists.ibiblio.org
Delivered-To: homestead AT lists.ibiblio.org
Received: from hotmail.com (bay4-dav18.bay4.hotmail.com [65.54.170.122])
        by happyhouse.metalab.unc.edu (Postfix) with ESMTP id 0A4DE4C005
        for <homestead AT lists.ibiblio.org>; Sun, 21 Nov 2004 12:40:03 -0500 
(EST)
Received: from mail pickup service by hotmail.com with Microsoft SMTPSVC;
        Sun, 21 Nov 2004 09:40:02 -0800
Message-ID: <BAY4-DAV182BCE3E3E55F6240A83C1D5C50 AT phx.gbl>
Received: from 65.54.98.166 by BAY4-DAV18.phx.gbl with DAV;
        Sun, 21 Nov 2004 17:39:00 +0000
X-Originating-IP: [65.54.98.166]
X-Originating-Email: [tonihawr AT msn.com]
X-Sender: tonihawr AT msn.com
From: "Toni Hawryluk" <tonihawr AT msn.com>
To: "Homestead mailing list" <homestead AT lists.ibiblio.org>
Date: Sun, 21 Nov 2004 09:32:26 -0800
MIME-Version: 1.0
X-Priority: 3
X-MSMail-Priority: Normal
X-Mailer: MSN 9
X-MimeOLE: Produced By MSN MimeOLE V9.10.0009.2900
Seal-Send-Time: Sun, 21 Nov 2004 09:32:27 -0800
X-OriginalArrivalTime: 21 Nov 2004 17:40:02.0250 (UTC)
        FILETIME=[2117EAA0:01C4CFF1]
Content-Type: text/plain;
        charset="utf-8"
Content-Transfer-Encoding: quoted-printable
X-Content-Filtered-By: Mailman/MimeDel 2.1.5
Subject: [Homestead] the IRS and a state income tax
X-BeenThere: homestead AT lists.ibiblio.org
X-Mailman-Version: 2.1.5
Precedence: list
Reply-To: homestead AT lists.ibiblio.org
List-Id: homestead.lists.ibiblio.org
List-Unsubscribe: <http://lists.ibiblio.org/mailman/listinfo/homestead>,
        <mailto:homestead-request AT lists.ibiblio.org?subject=unsubscribe>
List-Archive: <https://lists.ibiblio.org/sympa/arc/homestead>
List-Post: <mailto:homestead AT lists.ibiblio.org>
List-Help: <mailto:sympa AT lists.ibiblio.org?subject=HELP>
List-Subscribe: <http://lists.ibiblio.org/mailman/listinfo/homestead>,
        <mailto:homestead-request AT lists.ibiblio.org?subject=subscribe>
X-List-Received-Date: Sun, 21 Nov 2004 17:40:04 -0000

If your *state* does not have an income tax,

you won't be 'better off' for much longer :



excerpt:

"...minimum deduction of several hundred dollars to bring them to tax parity 
with residents of states with an income tax, as will itemizers in six other 
states that have a state sales tax but no income tax."



Just as sure as one hand gives, the other

is going to collect big-time 'sooner than

you think' ...



http://www.msnbc.msn.com/id/6538253/<http://www.msnbc.msn.com/id/6538253/>

 

Few people aware of new state sales tax deduction

By KRISTEN MILLARES BOLT

The Seattle Post Intelligencer      

USA - When Brandon Dow was lugging his newly bought couch back from Portland 
in the middle of last January's bitter ice storm, he thought he was crazy to 
have crossed state lines just to avoid Washington's sales tax.Dow could not 
have known that President Bush would sign the American Jobs Creation Act 10 
months later, passing with it a provision that makes Washington's state sales 
tax deductible from federal income taxes this year and next.

Some state officials are hoping that the state sales tax deduction will keep 
thousands of Washingtonians from skipping across the borders to plunk down 
their money, so that big-ticket consumers like Dow can count, and spend, 
their savings in the state.

Unfortunately for large spenders and the business owners who love them, the 
state sales tax deduction became law without much hoopla. Retailers and 
analysts are saying it won't leave a ripple in holiday sales, and even 
supporters of the bill say that people "won't really get it" until they see 
it in their tax refunds.

The Internal Revenue Service hasn't even published the rules for the new 
deduction yet. But here's what to expect: 

  Residents of Washington will be allowed a minimum deduction of several 
hundred dollars to bring them to tax parity with residents of states with an 
income tax, as will itemizers in six other states that have a state sales tax 
but no income tax.

  In addition, taxpayers will be allowed to deduct the sales tax paid for 
major purchases such as for cars and boats.

  Or, for the truly calculating, the federal tax rules will allow a 
taxpayer who has collected receipts to add up all of the sales taxes paid as 
a deduction. Not having known at the beginning of the year that this 
deduction was coming, most taxpayers are unlikely to be able to take 
advantage of this potentially even larger tax break.
The Internal Revenue Service is going to publish tables that establish dollar 
figures for the state sales tax owed to filers of various income levels, so 
that taxpayers do not have to save all of their receipts.
This chart, called Publication 600, will also include a list of major 
purchases that can be deducted in addition to the standard figure set by the 
charts. Cars and boats are currently included as major purchases that count. 
In the meantime, advisers say to save receipts of costly purchases, such as 
for home remodeling, electronics or jewelry, which may be added to the list.
So what does this all mean for Washington and its residents?
Chang Mook Sohn of the Washington State Office of the Forecast Council said 
that it's a positive move for the state.
"We are expecting about $420 million statewide, once the 2004 tax returns are 
filed," said Sohn. "That's $420 million more than this year that will be 
headed directly to expendable income."
Residents who already itemize their deductions should expect between $300 and 
$500 more per year in tax refunds, said Mike Gowrylow, spokesman for the 
Department of Revenue. He said that nearly a million taxpayers will itemize 
come April. That's 37 percent of all the taxpayers in Washington.
"Most of the benefit is going to people in the middle- to upper-income 
brackets between $50,000 and $100,000," said Gowrylow. "The question is if 
this money will be saved or spent, and how much will trickle up into the 
economy."
For Chris Titus, 29, and his brother Steven Titus, 38, it was never really a 
question.
"The sales tax was always a 'so what?' for me," said the elder Titus. "It 
won't impact my spending."
His younger brother agrees. "Maybe some people will go out and spend it, but 
that isn't part of my long-term plans.
"I am thinking about 30 years down the road, unlike a lot of my friends, who 
are only thinking about next Friday night," he added drolly.
That's just fine with lawmakers like Rep. Brian Baird, a southwestern 
Washington Democrat who has urged the deduction for years.
"It's not like we are expecting someone to say, 'Oh look, honey, let's go buy 
a computer now that we can deduct state sales tax,' " said Baird. 
"What has chafed everybody is that Washington wasn't able to deduct while 
other states were," said Baird. "The issue has always been equity, being on 
the same playing field."
Taxpayers in Florida, Nevada, South Dakota, Tennessee, Texas and Wyoming will 
also reap the benefits this spring. While the other 43 states have an income 
tax that can be deducted on their taxpayers' federal returns, these six 
states and Washington pay for state government and services with only their 
state sales tax.
Congress eliminated a tax exemption for these seven states in a 1986 tax 
bill, but 18 years of maneuvering in the House and the Senate brought the 
right to this deduction back. 
Trying to find out what it means for Washington businesses is another matter.
Most of the people contacted by the Seattle Post-Intelligencer for this 
article did not know about the deduction. Even many of the businesses most 
likely to benefit, such as auto and boat dealers, were also unaware of it and 
so had not been using it to leverage big-ticket sales for the holiday season. 
This tax break, though, isn't for everyone.
Many people will take the standard deduction because their purchases won't 
add up. Others whose gross adjusted income is more than $142,700 will only be 
able to deduct a percentage of their sales tax. 
"The major portion of consumption is done by the middle- to 
upper-middle-income residents anyway," said Sohn. "The lower income by 
definition spends most of their income on food and shelter and not much on 
taxable activities."
Regardless, the clock is ticking for retailers to target consumers while the 
deduction lasts, which may be shorter than the current two-year expiration 
date given the current aims of President Bush to reform the tax code.
Thomas Shulstad of Edmonds recently purchased a yacht that cost him $67,000 
in sales tax alone, but he hadn't heard of the deduction. "I don't think many 
people know about it," said Shulstad.
When asked if he would consider making further large purchases while the 
deduction lasted, Shulstad replied, "Now you're making me think about it 
more."
For a copy of the IRS charts and tables, due in January, call 1-800-TAX-FORM.


--------------------------------------------------------------------------------


P-I reporter Kristen Millares Bolt can be reached at 206-448-8142 or 
kristenbolt AT seattlepi.com