So the great news on December 20 was that President Bush signed into law an extension that allows Texas state residents (and residents of eight other states with no state income tax) to deduct sales tax from their federal taxes for the next two years. [Other renewed deductions were for higher tuition costs — allowing deductions of up to $4,000 of tuition and fee costs — and an educator expense provision, allowing teachers to deduct up to $250 for personal expenditures on school supplies.]
Hooray everyone. Alas, the 2006 paper forms have already printed. But no bother, the IRS is urging everyone to go electronic, with software that can be updated on the spot.
Which led one of my co-workers down the garden path to hell via TurboTax. As he attempted to begin to work through his return for this year, A FULL WEEK AFTER extensions were passed, it was obvious TurboTax was not checking its messages.
The information he continued to receive from TurboTax:
Deduction Availability Pending. You may qualify for the sales tax deduction. However, Congress has not yet passed legislation that would allow this deduction for the 2006 tax year. We will update TurboTax as soon as Congress decides to make this deduction available, but unfortunately, the decision is still pending.
At this point, you can finish your return and file without claiming this deduction, or you can wait until a decision is made and file at that time. Just be sure to file by April 16, 2007. In the event this deduction becomes available after you've filed, you will need to file an amended return to claim it.
Want an e-mail as soon as we know more? Yes, notify me.
For more information, see the TurboTax support site.
In the meantime, select Continue to work on the rest of your return."
Confident this was just a minor glitch, he called the help line.
And was patched straight through to India. To an Indian person, apparently perfectly capable about all things computer but totally at a loss to understand U.S. tax law or at least this particular subsection. "What is this sales tax pending please?" he was asked politely. Knowing when to give up, my co-worker exited the call, deciding to tackle this another day. — Margaret Downing
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