Russ: This is PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host. Today I’m here with Matt Powalski, a tax associate at PKF Texas. Matt, great to have you on the Playbook.
Matt: Thank you, Russ, glad to be here.
Russ: You bet. So here we are, year end 2013. On an individual’s tax return, what should they kind of be thinking about?
Matt: Sure. So currently individuals who itemize their deductions have the ability to either deduct state sales taxes or state income taxes. Now for us who live in Texas, there is no state income tax, so we only have one option.
Russ: Hallelujah! Which is great.
Matt: Exactly, exactly. So for us who are going to take this state sales tax deduction, we can either choose our predetermined state taxable rate based off of our income, or keep a ledger of all the transactions that we’ve had over the year.
Russ: So it’s important for them to remember just to take that deduction.
Matt: That’s correct. But also important is that not only can they take that predetermined state sales tax deduction, but they can also add on to it any big qualified purchases such as a boat or car.
Russ: Oh, whoa, add them together for a bigger deduction, cool.
Matt: Right. But more importantly is that this sales tax deduction will be eliminated come 2014.
Russ: Ugh, that’s bad news.
Matt: Right.
Russ: All right, well I really appreciate you sharing that with us, Matt, and I want you to come back and share some more with us, okay?
Matt: Will do.
Russ: All right, cool. This has been another Thought Leader Production bought to you by PKF Texas Entrepreneur’s Playbook. To find out more about income taxes, go to PKFTexas.com. And tune in next week for another chapter.