MySalesTaxApp was created to enable individuals to easily and conveniently record, store and access their sales tax expenditures for the purpose of maximizing their annual tax deductions.
The majority of Americans claim the standard sales tax deduction instead of choosing to itemize, because saving, storing and analyzing the hundreds of receipts required is too cumbersome. The sales tax deduction has been one of the most commonly underutilized deductions since its return to the tax code in 2004. The IRS estimates that out of the $400 billion dollars in unclaimed tax benefits, the sales tax deduction accounts for up to 15% or $60 billion dollars annually.
After downloading MySalesTaxApp to your smartphone, use the App to take a photo of your receipt, and MySalesTaxApp will do the rest.
Our integrated OCR technology will recognize the sales tax line on your receipt, record the amount and add that to your total sales tax expenditure for the year. When you file your tax return, input the total sales tax amount from your MySalesTaxApp dashboard onto IRS Schedule A. Alternatively, download a copy of all your receipts and data and send them to your tax professional. Should your receipts and data be required for an IRS audit, MySalesTaxApp stores your information for 7 years on our secure servers.
With MySalesTaxApp, you can scan and save a receipt in seconds at the time of purchase and return to view or tag it at any time. You decide how to tack spending across customizable categories by applying and searching by tags you create. Searching and sorting your receipts is simple. Print your receipts directly from your phone, or export the receipt data to your favorite accounting software.
In our next release planned for the summer of 2017, we will introduce family pooling, which will allow the head of household to pool the sales tax expenditures for all family members. We will also phase in store recognition to allow MySalesTaxApp to automatically filter by store name and location.
Yes. MySalesTaxApp is great for storing a copy of your receipts and keeping track of your spending.
Did you lose your receipt for the item you wish to return? No problem, access your receipt in MySalesTaxApp and let the store print it for you. Did a purchase from last year get recalled? Searching or printing your receipts from the past is as easy as finding a receipt from yesterday – You have access to your saved receipts for seven years!
Did you return an item and need to remove the expense from your total? Just scan the return receipt and MySalesTaxApp will recognize the return and decrease your total sales tax expenditure automatically.
When you file your annual tax return using IRS Form 1040, you have the option to claim either the standard deduction or you may choose to itemize your deductions. The standard deduction is a fixed federal amount based on the status you are filing (married, single, head of household). Taxpayers electing to itemize their deductions will file the Schedule A form as a supplement to their 1040. Both standard and itemized deductions reduce the annual taxable income and the prudent taxpayer will select whichever deduction minimizes their total taxable income.
The Schedule A allows taxpayers to itemize tax deductible expenditures within the following seven general categories:
The Schedule A comes with detailed instructions explaining which expenses are deductible and where one should list them on the form.
If you are itemizing your deductions by filing a Schedule A, you have the option of claiming either the state and local income tax deduction or the state and local sales tax deduction. Currently, the federal tax code does not allow the deduction of both state and local income tax and state and local sales tax. MySalesTaxApp provides taxpayers with the tools required to make an informed judgement on which deduction to choose. The sales tax deduction is most beneficial for those who live in a state where there are no state or local income taxes imposed: Florida, Texas, Alaska, Nevada, South Dakota, Washington and Wyoming. Additionally, residents of New Hampshire and Tennessee who only pay income tax on dividends and investment income will overwhelmingly choose the sales tax deduction.
In states which do impose an income tax, the sales tax incurred throughout the year may be larger than the total state income tax due. This may be due to a number of factors including a large purchase of a vehicle or building material, a high state and local sales tax rate, state income tax deductions, etc. The only way to truly know how to maximize your Federal Income Tax deductions is by tracking everyday spending and keeping a record of your receipts.
Anyone that is filing a tax return for a given year may choose to itemize their deductions, provided they have maintained records for claimed deductions. Statistics reveal that one out of four people benefit from itemizing their deductions. In fact, over the past decade the percent of US taxpayers choosing to itemize deductions has fluctuated between 25% and 35%.
Clearly, it makes sense to itemize deductions when the resulting deductions exceed the standard deduction. For many taxpayers, mortgage interest is a good benchmark for deciding whether or not to use the standard deduction. If your annual mortgage interest will be higher than the standard deduction rate (which in 2016 was $6,300), it is advantageous to itemize deductions.
However for taxpayers who don’t pay mortgage interest, it is more difficult to predict at the beginning of the year whether it will be beneficial to itemize on the year-end tax return. Many of the potential deductible expenses – like medical and dental costs, unreimbursed expenses sustained as an employee, and yearly sales tax expenditure are unpredictable, yet require time and effort to track and document.
For the millions of American taxpayers that have to decide how to calculate their tax deduction on a yearly basis, MySalesTaxApp’s new and innovative system of tracking your sales tax expenditures will become an indispensable tool in determining how best to minimize income tax owed.