IRS sales tax calculator

[schirallicpa]

When it asks for income, and the client has a schedule D, do we take the income amount on page 1 of tax return, or do we consider significant funds he pulled from stocks during the year, and not consider basis?  This obviously gives a larger sales tax calc.  But it would also reflect money available to him.  He's one of the few in WNY that doesn't have much income tax.  

Always appreciate this forum.

 

[RitaB]

38 minutes ago, schirallicpa said:

When it asks for income, and the client has a schedule D, do we take the income amount on page 1 of tax return, or do we consider significant funds he pulled from stocks during the year, and not consider basis?  This obviously gives a larger sales tax calc.  But it would also reflect money available to him.  He's one of the few in WNY that doesn't have much income tax.  

Always appreciate this forum.

 

I found this on the IRS calculator. Thanks for the question; I learned something.

What Income Should You Include for Determining Your Optional State & Local Sales Tax Deduction?

Your income is the amount shown on your Form 1040, "Adjusted Gross Income" line, plus any nontaxable items, such as the following:

• Tax-exempt interest
• Veterans' benefits
• Nontaxable combat pay
• Workers' compensation
• Nontaxable part of social security and railroad retirement benefits
• Nontaxable part of IRA, pension, or annuity distributions. Do not include rollovers
• Public assistance payments
• And any other nontaxable items

 

[Hahn1040]

ATX has a good worksheet for sales tax

It automatically add in the things it knows:  nontaxable part of social security and pensions, nontax combat pay (Q in box 12 of W-2);  there are spaces to add in for other things such as VA disability, etc.  

then you have to adjust for the local rates.  The ones I do all of the time, I know already.  But for other places, I go to the IRS online worksheet and plug in the figures then I find what the local rate is and I can put that into the ATX worksheet to get it to match the IRS figure.  If any of my income figures change later, the program adjusts for it because I have already put in the local rate etc. 

Be sure to add in for sales tax on a car boat etc.

there is a box to check to take sales tax vs. state tax.  This is very useful when you have someone with AMT and sometimes it saves on the state return to use sales tax when AMT has negated the state tax deduction on the federal.  Of course, you have to look at it both ways- some times one is better other times not... depends upon how far they are into AMT...  And of course, for some states there is no advantage.