Why am I Being Audited?

You just received notification that your business has been selected for a Texas Comptroller state tax examination. Unless you have been through the audit process before, you probably have lots of questions and concerns. Of course one of the first questions most business owners ask is, “Why my business?” Although it’s common to think you did something wrong, this usually isn’t the case. However, if you have been selected for audit, Texas Tax Group has a team of 15 former Texas Comptroller State Tax Auditors who can help you save time and money. (more…)

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Tax Deductions on 2012 Federal Income Tax Returns

Texans who itemize deductions on their federal income tax return can deduct state and local sales or use taxes paid on purchases made during the 2012 calendar year, including big-ticket items such as cars, recreational vehicles and boats.

To claim the federal deduction, eligible taxpayers can either:

Taxpayers who built a new home or improved their home in 2012 may deduct sales taxes paid on the materials incorporated into the real property improvement. Labor is not taxable for new construction or residential repair and remodeling.

To be eligible for the deduction, the homeowner must have:

  • purchased the materials directly from, and paid tax to, the building materials supplier; or
  • worked with a contractor under a separated contract.

Lump-sum (one price) contracts are not eligible for the deduction because a contractor performing a contract for a lump-sum price pays the sales tax on materials and does not collect tax from the customer. Since the customer did not pay tax to the contractor, the customer cannot deduct the tax on the federal income tax return.

*Originally published in Tax Policy News; a monthly newsletter about Texas tax policy at http://www.window.state.tx.us/taxinfo/taxpnw/tpn2013/tpn1302.html#issue2.

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