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November 2015 • www.CPAPracticeAdvisor.com 13 But one yea r-end ta x pla n n i ng st rateg y rema i ns i n l i mbo: Unt i l Cong ress moves to rei nstate t he alternative deduction for state sales taxes – if it ever does – this option is not available. Te deduction for taxes claimed on Schedu le A i ncludes a mou nts paid for state and local income taxes such as the taxes withheld from your paychecks and any estimated taxes paid during the year. It also includes proper t y t a xes i f you're a home- ow ner. For m a ny t a x payer s , t he deduction for state and local taxes is one of t he big gest w r iteof fs t hey have on Form 1040. P r ior t o 2 015 , t a x p a y e r s h a d another choice. In lieu of deducting state and loca l income ta xes, you could elect to deduct the state and local sales taxes you paid during the year. It was one or another, but not both. Te sales ta x deduction was claimed in one of two ways. • You deduct the actual sales tax paid dur ing the year. To prove the amount, you had to keep receipts or other documentation of purchases. • You could deduct an amount under the IRS sales tax table. Te deduc- tion varied from state to state and was also based on family size. Practically speaking, the table amount was ofen lower than the actual amount of annual sales tax paid, but less of a hassle for busy taxpayers. Icing on the cake: In addition to the IRS table amount, you could add t he sa les ta x for t hese " big-ticket items": • Lease or purchase of a vehicle, • Purchase of a boat or aircraf; and • Purchase or substantial addition or renovation to a home. Sometimes, the extra sales tax paid for qua lif ied big-ticket items was enough to justif y tak ing the state sales tax deduction. In any event, the state sales tax option was a no-brainer for taxpayers in states with no or a very low state income tax. However, the alternative deduc- tion for state and local sales ta xes expired afer 2014. Now you have to w a i t- a n d - s e e w h a t h a p p e n s i n Congress. Don't throw out any sales ta x receipts you've been keepi ng du r i ng t he ye a r. I f t he opt ion a l deduction is revived retroactively, as is genera l ly ex pected, you ca n cr unch the numbers at ta x return time and choose the best alternative. Regardless of your personal situa- t ion c onc er n i n g s t ate a nd loc a l income taxes versus sales taxes, you can prepay propert y ta xes due on January 1, 2016 so the extra taxes are deductible in 2015. But be aware that this might cause alternative min- imum tax (A MT) complications for some taxpayers. Te best approach is t o d e v e l o p a n o v e r a l l y e a r - e nd strategy that makes sense. Year-End Insights for State and Local Taxes By Ken Berry U sually, taxpayers who itemize their deductions can write of most of the state and local taxes they pay in 2015, pro- viding an opportunity to lower their federal income tax bill. In fact, you might even accelerate payments so you can increase your current deduction. Ken Berry, Esq., is a nationally-known writer and editor specializing in tax and fnancial planning maters. During a career of more than 35 years, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company in the fnancial services industry. As a feelance writer, Ken has authored thousands of articles for a wide variety of newslet- ters, magazines and other periodicals, emphasizing a sense of wit and clarity. A Year in the Life of a SALT Accountant is sponsored by Avalara Y e a r - E n d c c o u n t a n t b y A v a l a r a November SALT Checklist OpenItems–Workwithclientstoresolveanydefcien- cies and penalties for past due state and local taxes Payments – Help clients set up budgeting plans for monthly and quarterly SALT payments Online Businesses – Discuss online selling activities with clients and make sure they are aware of sales tax responsibilities (see related article) Planning – Start talking with your clients about 2015 SALT requirements now and determine if they need software support to stay current with their obliga- tions in various states Legislation – Recent legislation has affected taxes in Alabama and Oregon. Make sure you stay current on SALT-related legislation in states where your clients are doing business Ballot Box – Tax issues were on the November election ballots in California, Georgia, Missouri, Ohio, and more. Make sure you check the election results in states where your clients are doing business (This is part of our series of "sweet 16" year-end tax planning ideas.)