An article in the Wall Street Journal today highlighted the two most missed tax deductions in 2006.
The first one simply would not impact a Wisconsin taxpayer except in a very rare case. In 2006, the IRS allowed taxpayers to deduct sales taxes paid instead of state income taxes paid. As our State income tax rate is higher than the sales tax rate and it's hard to spend more than you earn, it's unlikely you paid more in sales taxes than you did in state income taxes. We used this deduction heavily in states that do not have a state income tax such as Washington, Texas, Florida and Tennessee.
The next is the phone excise refund that everyone was entitled to. Depending on your status you could get between $40 and $60 back. Thankfully, our software automatically took the deduction as did most tax software programs. However, if you prepared your return the old fashioned way you may want to take a look to see if you claimed this deduction.
Mike
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The "safe-harbor" amounts that can be claimed are between $30 and $60, depending on the number of your dependents. (ex. A married couple with two young kids would normally claim four exemptions on their federal income tax form, and thus be able to claim $60 from the telephone excise tax refund--TETR.)
Sad that there has been such a discrepancy among the groups who participated in TETR--and who didn't: according to IRS, only 3-4% made claims among the poorest eligible American households--that is, those households that don't make enough to file federal income taxes and were required to file a special form to get their refund.
This is a serious failure of the refund program that should have been foreseen and should be addressed.
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