Author Topic: Who here itemizes sales taxes for personal purchases?  (Read 1624 times)

Aggie1999

  • Bristles
  • ***
  • Posts: 385
Who here itemizes sales taxes for personal purchases?
« on: January 24, 2017, 08:00:16 PM »
I've always been to lazy to keep receipts so I can itemize the sales taxes I paid for the previous year. I just always use the IRS sales tax calculator for the deduction. Who here keeps track of the sales taxes they paid throughout the year?

Also, do you have to keep the receipts or is alternative proof such as charges on a credit card statement good enough (i.e. $6 at Taco Bell on the credit card so claim $6 * sales tax rate). If charges on credit card statements, bank statements, etc are good enough then it wouldn't be that much work to calculate it.

maizefolk

  • Magnum Stache
  • ******
  • Posts: 4835
Re: Who here itemizes sales taxes for personal purchases?
« Reply #1 on: January 24, 2017, 08:30:22 PM »
So just to be annoying, if the charge is 6.00 at taco bell, the sales tax would be 6.00 - (6.00/(1+sales tax rate))

(There's gotta be a way to simplify that equation but it's not occurring to my tired brain tonight).

More pragmatically, the IRS sales tax table is based on your income. If you're a mustachian in the accumulation phase and spending a lot less than you earn, I'd guess the estimated sales tax paid is actually quite a bit more than you actually paid, so it'd be better not to track actual taxes paid.

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 5467
  • Age: 36
  • Location: Seattle, WA
    • My blog
Re: Who here itemizes sales taxes for personal purchases?
« Reply #2 on: January 24, 2017, 09:29:32 PM »
Yep, I'm in the same boat. I tried keeping receipts for a couple of years and determined the IRS expected me to spend a much larger fraction of my income than I actually do. I use the standard amount now.

Paul der Krake

  • Walrus Stache
  • *******
  • Posts: 5082
  • Age: 12
  • Location: UTC-10:00
Re: Who here itemizes sales taxes for personal purchases?
« Reply #3 on: January 24, 2017, 10:14:58 PM »
Yep, I'm in the same boat. I tried keeping receipts for a couple of years and determined the IRS expected me to spend a much larger fraction of my income than I actually do. I use the standard amount now.
The IRS calculator is actually pretty conservative, in the grand scheme of Americans' shopaholic tendencies. They do have a vested interest in not giving back too much, after all.

A married couple in King County, WA, with an AGI of 200-220k per year, is supposed to spend $2,481 on sales tax, or roughly 25k on purchases per year. I'm willing to bet there is a significant percentage of high earners who spend that much just on restaurants.

Aggie1999

  • Bristles
  • ***
  • Posts: 385
Re: Who here itemizes sales taxes for personal purchases?
« Reply #4 on: January 24, 2017, 10:16:56 PM »
Very good points. I'm just starting the formal mustachian spending regiment so I was mainly thinking about itemizing my sales tax from 2016. I'll probably take all my spending from credit cards and bank account statements in 2016, calculate the tax on the transactions I know would be a the full sales tax rate (restaurants, car repair, home improvement stores, etc) and see how the numbers work out. Still open question though whether no-receipts but transactions on statements is good enough.

Also good point about the sales tax not being the rate on $6 but the rate on the amount before the sales tax was added to bring the total bill to $6.