Only in America can you have one of the biggest shopping events the very next day after one of the most prominent holidays in the nation. That’s right, the infamous Black Friday – the one day out the year where people literally go wild for some of the best annual consumer deals. Whether you’re shopping for yourself, or for someone else, one thing you can bet on is feeling the loss in your pocket. And though that money is gone once it’s spent, you can still have those purchases work in your favor around tax time.
Sales Tax Deductions
By keeping record of your Black Friday purchasing receipts, you can apply those to your deductions on your personal tax return. Whether you choose to itemize deductions or to use standard deductions is an important choice. Experts recommend to itemize your deductions; otherwise, you won’t be able to claim the sales tax you paid. Once your expenses have been itemized, you can choose whether you want to deduct it from sales tax or income tax. You should choose the one that gives you the biggest tax break.
How Much To Deduct
How much can you actually claim in sales tax? Well, as long as you have the documentation, there really is no limit. If, for some reason, you don’t have all your spending receipts, but you paid using credit or debit, you can get access to your statements online to get an accurate computation of the sales tax you’ve paid.
Hey! Big Spender!!
There’s no doubt that you’ll find some decent deals this Friday, but for the purposes of tax deductions, we’re talking about the really big purchases:
- Expensive jewelry
- Electronic equipment
- Home furniture or appliances
If you’re attempting to deduct purchases under $500, you may find that the payout isn’t worth all the effort you invested. Deduction amounts can be based from taxpayers’ average consumption, account filing status, local and state adjusted gross income, and even the number of dependents. The IRS supports an online calculator for sales tax deductions, which you can use for your estimation.
You should take advantage of having a certified tax professional in your corner because there are a number of variables that can keep you from receiving the biggest deduction possible. For instance, nontaxable income amounts should also be considered for sales tax deductions. If your total income is larger, your deduction will come out larger as well. A tax professional can expand on the more fine details of sales tax deductions.
With some Black Friday sales starting at midnight Friday morning, the experience can be fun, but also a little stressful with the long lines and erratic behavior from other shoppers. For helpful suggestions on experiencing a more enjoyable Black Friday, check out the following blog:Holiday Shopping Tips & Tricks
Best of luck this Friday and be safe!
Don’t forget that if you need more time during tax season to get all your deductions in order, you can e-file a tax extension with ExpressExtension. Create a FREE account today and enter your information. If an extension becomes necessary, simply login to your account and transmit the information that’s already entered directly to the IRS.
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