With Tax Season Around the Corner, Cantwell Reminds Washingtonians to Take Advantage of Sales Tax Deduction
With Tax Season Around the Corner, Cantwell Reminds Washingtonians to Take Advantage of Sales Tax Deduction
W-2 forms must be sent to taxpayers by January 31 Under Cantwell provisions, Washingtonians claimed $2 billion in deductions on 2004 returns; Senator continues fight to make important tax cut permanent
Monday, U.S. Senator Maria Cantwell (D-WA) reminded Washingtonians to take full advantage of the sales tax deduction.
"As Washingtonians receive their W-2 forms and start doing their taxes, I want to make sure everyone remembers to take advantage of the sales tax deduction," said Cantwell. "Taxpayers across our state are facing the strain of sky-high energy, education, and health care costs. This tax cut is a good way for them to get hard-earned money back into their wallets."
In most other states, taxpayers are allowed to deduct state income tax from their federal taxes. However, residents of states with a higher sales tax in place of state income taxes have not been allowed a sales tax deduction since changes to the tax code were made in 1986. In 2004, Cantwell worked with a bipartisan group of senators to pass provisions allowing Washington state taxpayers to deduct state and local sales taxes from their annual federal income tax returns.
Washingtonians claimed $2 billion in deductions on their 2004 returns under the Cantwell provisions, with taxpayers who took advantage of the cut saving an average of over $500 each. The Washington state Office of Revenue Forecast estimates that the deduction will create between 2,000 and 3,000 new jobs and more than $200 million in economic stimulus.
"This is about tax fairness" said Cantwell. "Without this deduction, Washingtonians get taxed twiceonce when they make a purchase and again when they file their tax returns. This tax cut not only jumpstarts our economy, it extends to Washingtonians the same benefits we give the citizens of almost every other state."
With the sales tax deduction expiring after the 2005 tax season, Cantwell is fighting to make the deduction permanent. The IRS has posted tables and instructions at http://www.irs.gov/pub/irs-pdf/i1040sa.pdf. See page 11 for the Washington state table. There is a fact sheet on the sales tax deduction at http://www.irs.gov/newsroom/article/0,,id=152316,00.html
http://cantwell.senate.gov/news/record.cfm?id=250879&&days=30&