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Level 3
posted Jan 14, 2025 9:46:49 PM

Sales Tax

Here is the situation:

 

  • On December 25,2024, I ordered online a computer (Order Date)
  • The date on the invoice is December 26, 2024 (Invoice Date)
  • On my online credit card account, the amount appeared as a posted transaction on December 31, 2024 (Posted Date)
  • The monthly credit card statement will be available to me on January 17, 2025 (Monthly Statement Date)
  • The amount for the monthly credit card statement is automatically deducted from my bank account on February 9, 2025 (Credit Card Payment Date).

 

Here is the question:

 

  • Which date (Order Date, Invoice Date, Posted Date, Monthly Statement Date, or Credit Card Payment Date) determines to which tax year the appropriate sales tax belongs?

0 2 2703
2 Replies
Employee Tax Expert
Jan 16, 2025 2:32:56 PM

Provided you are using this for business: 

The sales tax is included in the cost of the computer. It will be deducted in 2024 because it was posted to your credit card at that time.

 

The credit card Transaction Date (Posted Date) is the date that applies.

 

If this is a personal purchase:

It still would be considered for deduction in 2024.

This would be an Itemized deduction.

The IRS guidelines state "Your total deduction for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if married filing separately)."  Use the Sales Tax Deduction Calculator

 

In 2024 the total Itemized deductions must exceed the standard deduction of $14,600 for single, or $29,200 for a married couple to take effect.

[Edited 01/16/25|4:21pm PST]

Level 3
Jan 17, 2025 9:11:48 PM

John,

 

thank you very much for your comments. They speak in the terms I know and provide relevant  additional information. Your comments make a lot of sense to me. The fact that I need to actually pay the amount due at a later point in time, i.e., when the amount of the credit card statement is automatically deducted from my bank account, is a different matter and does not directly have something to do with the original transaction.

Thanks for taking the time