Archive for July, 2014

Many back-to-school expenses eligible for state income tax deductions

BATON ROUGE – The Louisiana Department of Revenue encourages families to retain their receipts while shopping for back-to-school items such as books, uniforms, supplies, and equipment required by schools. Many families will buy these items during the state’s annual sales tax holiday August 1 and 2, when most retail purchases are exempt from the 4 percent state sales tax. But they might not know these expenses may qualify also for a series of income tax deductions on their state individual income tax returns.

And these deductions apply to eligible expenses paid throughout the tax year, not only during the two-day sales tax holiday.

There are three income tax breaks under the Louisiana School Tuition and Expense Deductions:

Income Tax Deduction for Elementary and Secondary School Tuition - Allows an income tax deduction for amounts paid during the year for tuition and fees at a qualifying nonpublic elementary or secondary school. The deduction is for 100 percent of qualified expenses paid per dependent, limited to $5,000 per dependent.

Income Tax Deduction for a Quality Public Education – Allows an income tax deduction for the following expenses for a dependent enrolled in a public elementary or secondary school:

  • Purchases of school uniforms required by schools for general day-to-day use
  • Purchases of textbooks, curricula or other instructional materials required by schools
  • Purchases of school supplies required by schools

The deduction is for 50 percent of qualified expenses paid per dependent, limited to $5,000 per dependent.

Income Tax Deduction for Home-Schooling Expenses – Allows an income tax deduction for amounts paid for the purchase of textbook and curricula necessary for home-schooling. The deduction is for 50 percent of qualified expenses paid per dependent, limited to $5,000 per dependent.

These deductions can reduce your taxable income when you file your 2014 Louisiana Individual Income Tax Return by May 15, 2015. To qualify, you must be able to claim the student as a dependent on your state individual income tax return, and you must be able to document the expenses.

Visit www.revenue.louisiana.gov/schooldeduction for a full explanation of the provisions of the Louisiana School Tuition and Expense Deductions.

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Office of Debt Recovery to be fully operational within three years

BATON ROUGE – The Louisiana Office of Debt Recovery (ODR) is on schedule to be fully operational within three years, Secretary of Revenue Tim Barfield reported to the state Cash Management Review Board on Thursday.

ODR will be a highly automated, efficient, and centralized debt collection office that provides collection services for state agencies. It will include a suite of debt collection tools and will work with the Office of the Attorney General and outside collection agencies to perform collection services.

ODR was created by the Louisiana Legislature to assist state agencies in collecting overdue debts determined to be “final debt” after exhausting all administrative and legal due process. Housed in the Louisiana Department of Revenue, ODR will use new tools to identify and collect final debt payments on behalf of those agencies.

Implementation is progressing quickly, largely using LDR’s existing human and budgetary resources. “Looking at the states with state-of-the-art centralized collection operations, this implementation will be completed at least 25% and as much as 50% faster,” Barfield said.

“ODR has already implemented its electronic debt registry, significantly expanded use of an existing collection tool, implemented two new collection tools and has begun collecting debts,” Deputy Secretary of Revenue Jarrod Coniglio said.

Collection tools already in use by ODR include LDR’s state tax refund offset; financial institution data match (FIDM) that allows it to identify and levy final debt payments from the bank accounts of debtors who have exhausted their due process; and a federal vendor payment intercept program that allows ODR to collect final debt from payments owed to companies doing business with the federal government who have exhausted their due process.

Already, 281 of 340 (82%) financial institutions have signed up for participation in the FIDM program, which are estimated to cover over 90% of deposit accounts in the state.

A request for proposals (RFP) for the automated collection system is currently being developed. “Today, we’re working with manual processes, but will issue an RFP in mid-August to develop a fully automated case management system,” Coniglio said. “The automated system will be fully scalable, and will allow ODR to increase its workload with a minimum of additional human resources.”

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2014 Louisiana Annual Sales Tax Holiday: Most retail purchases exempt from state sales tax August 1 & 2

BATON ROUGE – Just in time for back-to-school shopping, most retail purchases in Louisiana are exempt from the 4 percent state sales tax on Friday, August 1, and Saturday, August 2. The 2014 Louisiana Annual Sales Tax Holiday applies to most individual consumer purchases of tangible personal property.

Conditions

The sales tax holiday exempts the first $2500 of the purchase price of each eligible item when the customer:

  • Buys and accepts delivery of eligible property;
  • Places property on layaway;
  • Acquires property that was previously placed on layaway; or
  • Places an order for immediate delivery, even if the delivery must be delayed, provided the customer has not requested delayed delivery

The sales tax holiday applies only to the 4 percent state sales tax. Local sales taxes still apply unless the local taxing authority creates its own exemption.

Exceptions

The sales tax holiday does not apply to:

  • Vehicles subject to title and license
  • Meals prepared for consumption on premises or to-go; and
  • Taxable services such as hotel occupancy, laundry services, printing services, telecommunication services, the furnishing of cold storage space, leases or rentals of tangible personal property, repairs to tangible personal property, and admission to athletic, amusement, or recreational facilities or even

Visit www.revenue.louisiana.gov/taxholiday for a full explanation of conditions of the 2014 Louisiana Annual Sales Tax Holiday.

Back-to-School Tax Deductions

The Louisiana Department of Revenue reminds shoppers to retain receipts for back-to-school items such as supplies, uniforms, and equipment required by schools. These purchases may qualify for tax deductions on 2014 Louisiana Individual Income Tax Returns due May 15, 2015. The deductions apply to educational expenses for public, private, parochial, and home schools. To claim the deductions, you must be able to claim the student as a dependent on your state individual income tax return, and you must be able to provide documentation for the expenses.

For more information about the Louisiana School Tuition and Expense Tax Deductions, visit www.revenue.louisiana.gov/schooldeduction.

 

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