Q: Is there any hope that Congress will extend the sales-tax deduction on our federal income tax returns for 2012 and on?
—B.W.B., Lake Worth, Fla.
Yes, there are good reasons to be hopeful that lawmakers will extend this provision that expired at the end of last year. This law has long been very popular, and Florida is an important state in this year's elections.
"The sales tax deduction is likely to be extended" for 2012, says Tim Hanford, a consultant in Bethesda, Md., and a former tax staffer on the House Ways & Means Committee. But he says Congress might not act this year until after the November elections.
Taxpayers who itemize their deductions can either deduct the general state and local sales taxes they paid or deduct state and local income taxes.
This law is particularly beneficial for people who live in Florida, Texas, Washington and other states that have no state income tax. But it also helps taxpayers who wind up owing very little in state and local income taxes.
Crunch the numbers both ways to see which works best for you. If you claim the standard deduction, this provision won't apply.
The staff of Congress's Joint Committee on Taxation (www.jct.gov
) recently issued a publication listing tax provisions that are scheduled to expire through 2022. Look on the committee's website for Publication JCX-1-12, dated Jan. 6, 2012.