Now the deductibility of state sales tax is a done deal for 2004 and 2005 tax returns, what should we expect next?

When I reported the news in early October, I mentioned CCH comments:

"Congress realized that it was imposing a burden by ordering the creation of these tables so close to the end of the year and the beginning of filing season. As a result, the conference report indicates that conferees don’t expect the Treasury to have the tables ready before the 2005 filing season. What estimates will be allowed for 2004 returns without these table remains to be seen."

In other words, although we are entitled to sales tax deduction, we might not know how much to deduct any time soon.

Kerry M. Kerstetter offers his assessment in his Tax Guru-Ker$tetter Letter blog:

"I have seen some comments on some tax related discussion boards that IRS won't have the tables out until March 2005. Even considering IRS's legendary slowness in doing lots of things, I don't see them taking that long to issue their official tables. That would hold up millions of taxpayers, plus the software companies that produce tax return programs, much too far into the normal filing season. I would expect the tables to be out by the beginning of January, at the latest."

Also, on big unusual purchases:

"While IRS hasn't officially announced what other kinds of big-ticket items can be considered for the additional sales tax deduction, I feel safe in assuming that it will be similar to what we had before 1987. Back then, any purchases of several thousand dollars at a time qualified. Besides boats and motor vehicles, those included purchases of furniture, appliances and expensive jewelry. With some of today's home theater systems costing over $10,000, I would count those purchases as well."

One of my 2005 action items is to start saving receipts so that I can add up the total state sales tax I pay and take the more favorable choice between deducting the actual sales tax or deducting according to IRS table. I understand it will be very time consuming (and space consuming), so I will probably assess the situation once IRS table is published -- I have a pretty good sense of what I pay in 2004 from my personal finance software, and if my actuals are not way higher than what the IRS table dictates, I might not save receipts for the whole year just for penny gains.