|
TWO FEDERAL TAX DEDUCTIONS REMAIN FOR BOATERS |
|
|
|
ALEXANDRIA, Va., Jan. 15, 2008 –When Congress adjourned
for 2007, they left in place two federal income tax deductions of potential
benefit to boat owners.
A boat is treated like a second home for federal
tax purposes if it has a galley, a head, and sleeping berth. Mortgage interest
paid on the loan is deductible from your federal income taxes. Taxpayers may use
the mortgage interest deduction for one primary home and one second home and
must itemize deductions on their returns.
Some boaters may be unaware of this potential tax benefit because not all
lending institutions send borrowers an Internal Revenue Service form 1098 which
reports the interest paid. Not receiving the form does not preclude taking the
deduction. If a 1098 is not available, boaters should contact their lender for
the amount of interest paid and should enter it on line 11 on Schedule A along
with the lender’s tax ID number. If a form 1098 is sent, boaters should simply
enter the amount on line 10 of Schedule A.
The other tax benefit is a
deduction for state sales taxes. However, this may no longer be available after
the 2007 tax year if Congress does not act to extend it. This deduction may be
appropriate for boaters who paid substantial sales tax on the purchase of a new
or used vessel last year. Boaters must choose either the state sales tax
deduction or state income tax deduction on their federal tax return — you cannot
take both.
In addition, to take the sales tax deduction, the sales tax on
a boat purchase must be applied at the same tax rate as the state’s general
sales tax. In order to claim the sales tax deduction, tax returns must be
itemized. State sales taxes are entered on Schedule A, line 5b.
For
those who fall under the Alternative Minimum Tax, most deductions are
unavailable as taxes are calculated differently. Boaters are urged to contact a
tax preparer or financial advisor for more information.
For more details
on the mortgage deduction, go to http://www.irs.gov and download Publication 936 or
the Fact Sheets. For state tax deduction information download Publication 600,
which also includes state-by-state tax tables.
BoatU.S. – Boat Owners
Association of The United States – is the nation’s leading advocate for
recreational boaters providing its 650,000 members with a wide array of consumer
services.
Views: 2567 | Print | E-mail
Only registered users can write comments.
Please login or register. Powered by AkoComment Tweaked Special Edition v.1.4.6
AkoComment © Copyright 2004 by Arthur Konze - www.mamboportal.com
All right reserved |
News 
Be first to comment this article
