Saving Receipts?

Question

I saw on a previous post that if you save all your receipts for the year that you paid taxes on, you can get that money back at the end of the year. Does this mean EVERY receipt like eating out and clothes or just certain ones like major purchases for your house?

Answer 1

The biggest question I have for you is this: What state do you live in? If you live in a state with no state income tax (TX, TN, FL, a couple others), it might be beneficial to save all your receipts and add up all the state and local sales taxes. If you live in a state with a state income tax, chances are you'll be better off taking the state income tax deduction instead.

Of course, everyone's situation is different and you should consult a tax professional or research more at http://www.irs.gov

Answer 2

Judy and RamsGod is right on about the sales tax deduction. There really is no need to save the sales tax receipts unless you either bought a very expensive item (car, boat, etc) because the majority of the times, the state income tax you paid will be more than the sales tax you paid.

The IRS also has a table estimating how much a person pays for sales tax in a year given their income.

Answer 3

I assume you're talking about deducting sales tax that you paid. This just came back I think two years ago, and only is allowed if you itemize. You have a choice of deducting sales tax or else state plus local income tax, can't take both. There's a table for state and family size that gives you an amount of sales tax you can deduct without any receipts. If you save receipts and the total sales tax paid is more than the table shows, you can deduct that, if you prefer, rather than your state and local income taxes. Under some circumstances, you can add sales tax paid on particular items to the table amount for sales tax.

You don't get back all the sales tax money that you paid - you get that amount as a deduction, so it reduces your federal income tax by whatever your marginal bracket is.

Answer 4

Judy is right. You add up the sales tax on every purchase and then by itemizing, you take that deduction.
If you paid sales tax on an automobile, boat or other big-ticket item, you might do better to deduct sales taxes.
There's a worksheet in the Form 1040 instruction booklet to estimate your sales-tax deduction so you don't have to save receipts.
http://www.irs.gov/individuals/article/0,,id=118506,00.html

Answer 5

I do not believe that you can ever claim sales tax as a deduction. Deductable expenses usually come in the form of interest paid on a home loan (mortgage) or business expenses (but there are strict rules about how much of everything you can deduct for a business). You can also claim items that you gave as charity donations/gifts, such as cash or clothing. However, you can only use those if you are itemizing your return (instead of using the standard 1040ez).

Last year, I used Turbo Tax online and that was SO helpful. It showed me all the possibilities of what I could and could not claim.

Answer 6

If you keep your receipts for allowable deductions (like for business, medical, work - even clothes) you can deduct those expenses if you choose to itemize your taxes. Not all expenses are deductable. Check the irs website for more specific info.

Answer 7

No you cannot write off everything. Most people cant write off a lot unless you are self employed or a business owner. Then the benefits become quite great.

Consult a CPA to find out more.

Typical write offs include:
Interest, office expenses, sq ft of home used for office (if home based business), part of bills, business related meals, gas to and from clients, business clothing, etc.

Hope this helps!