The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: purple monkey on December 28, 2015, 03:03:15 PM
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Hello,
Do you include these on your state return?
Also, do you count cash back rewards as income?
TIA.
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Regarding the second question, no, cash back from credit cards and even hundred-dollar signup bonuses are considered "rebates" and not income, so they are not taxed. Another reason to churn!
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1) I never did but Amazon does charge tax on purchases now...
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Thank you.
I have not seen any of my purchases (this year at Amazon) with a tax added, but one.
I guess it depends on if there is a brick and mortar.
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my state tax form has a box that says essentially "beats me what i bought that id owe you tax on, how about you charge me the average and we both call it good" they base it on income and its usually around $50 I just pay rather than worry or get my taxes flagged for saying i buy nothing on Amazon....
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We used to do the same thing (taxes based on...income? Something - never much), but now Amazon charges taxes, so that makes it easier.
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They charge sales tax now.
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I think in my state the "Use Tax" allows the 1st $770 in purchases (for which sales tax was not collected) to be exempt. Amazon collects sales tax in my state now, however, so its a moot point as that definitely was always the vast majority of my tax-free purchases. All that being said, I don't think anyone actually puts anything down, as it is well known that is basically impossible and fruitless for the tax collectors to prove what you purchased.
Now, if you did buy some extremely expensive things tax-free, I can see wanting to avoid problems by actually reporting it. $10 million in purchased artwork or something like that could definitely cause issues I imagine! Or perhaps buying a vehicle in another state...not sure how that all works tax wise, but that could be something you need to report.
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Amazon charges tax in my state.
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Amazon has always charged sales tax in Washington. But we have no state income tax, which means we get to claim the state sales tax rebate on our federal return. That rebate is based on income, not actual sales tax paid, so high earning low spending mustachios benefit significantly.