Increase your standard deduction when you file taxes

If you paid real estate taxes in 2009, or paid sales tax on the purchase of a new vehicle after February 16, 2009, you may be entitled to deduct a portion of those on your Federal tax return, even if you do not itemize deductions.

This year, taxpayers should file Schedule L - Standard Deduction for Certain Filers, if they are not itemizing but have any of the following:

- payment of real estate taxes in 2009 (limited to $500, or $1000 if married filing joint)
- sales tax paid on a new car purchased after February 16, 2009 (this is NOT "cash for clunkers", but if you participated in cash for clunkers you can take this deduction too)
- a net disaster loss in 2009

If you already itemize, then you already can deduct these and you don't need to worry about Schedule L.

The deduction for sales tax on a new vehicle is limited to the tax attributable to the first $49,500 of the purchase price of each vehicle. This deduction is only available to taxpayers with an AGI of less than $125,000 ($250,000 if married filing jointly).

Consult your tax professional or the IRS for full details. Schedule L and its instructions are online at http://www.irs.gov/pub/irs-pdf/f1040sl.pdf.

 

I'm just about to sit down and do my taxes with TurboTax...do you know if this deduction is just part of the questions I'll be asked?

 

I'm not familiar with TurboTax specifically, but most of the tax software packages seem to be pretty good at calculating this kind of thing automatically. The only catch is that they usually ask a lot of "Did you...?" questions, and it can be easy to miss the relevant questions when most of them don't apply to you. I would expect it will ask something like "Did you pay any real estate taxes?" at some point, and then get details from you if you say yes. (Or "Did you buy a new car?") You can check to make sure Schedule L (or Schedule A if itemizing is better for you) is included as part of your completed return before you file it.

 

TurboTax will ask you the real estate tax question, don't recall the new car one as I didn't buy a new car.

TurboTax does not (if I remember correctly) directly ask you about personal property tax on cars so you do need to be aware of that one.