- Days left

Save a Bundle on Back-to-School with Sales Tax Holidays


Irea Sotero shops the day before the start of a School Sales-Tax Holiday.
When times are tough, every penny counts. That's why shoppers look forward to what has become an annual summer ritual in many states: the chance to avoid sales tax on certain purchases.

Most of the tax holidays are slated to take place in late July or during August. To get a list of tax holiday dates, check out this list from the Federation of Tax Administrators. But if your state isn't listed there, double-check with your state's Department of Revenue for possible updates.

Different States, Different Tax Breaks

Sales tax holidays were originally established in many states in order to help back-to-school shoppers cut costs on purchases for their children. As a result, many of the states giving holidays, including Arkansas, Connecticut, Florida, Iowa, Maryland, Mississippi, Oklahoma, Texas and Virginia, limit their applicability to clothing, footwear, and school supplies. Most of those also states put dollar limits on purchases, typically ranging from $75 to $100 on clothing and $20 to $100 for school supplies.

But several states go beyond those basics to include some big-ticket items that are arguably connected to school. For instance, Alabama, Georgia, Missouri, New Mexico, North Carolina, South Carolina and Tennessee have expanded their list to include computers, with maximum limits ranging from $750 to $3,500.

Still other states simply give a blanket exemption on nearly anything you can buy. In Louisiana, most purchases carrying a price tag of less than $2,500 are exempt from tax during the holiday. And although Massachusetts hasn't finalized its sales tax holiday for 2012, lawmakers are expected to pass a measure creating one this year, and last year's holiday gave shoppers an exemption on most items up to $2,500.

A few states have also started experimenting with tax-free sales in other categories. For instance, Alabama and Louisiana have offered tax holidays on hurricane-preparedness items. Several states have given holidays focusing on energy-efficient appliances.

With sales tax rates typically ranging from 4% to 7%, the savings from not having to pay sales tax aren't like winning the lottery. But for cash-strapped families, every little bit adds up.

So don't miss out -- find out when your state's tax holiday is and take advantage of it this year.

For more on taxes and family saving:

You can follow Motley Fool contributor Dan Caplinger on Twitter here.

Increase your money and finance knowledge from home

How much house can I afford

Home buying 101, evaluating one of your most important financial decisions.

View Course »

Understanding Credit Scores

Credit scores matter -- learn how to improve your score.

View Course »

TurboTax Articles

Infamous Tax Crimes

Although most Americans fill out their tax returns diligently and honestly, not all taxpayers are as respectful of the law. Some wealthy taxpayers cheat because they feel they already pay more than their fair share of taxes, while some regard the entire tax system as unconstitutional. Regardless of the reason, it's big news when the rich and famous are convicted of tax crimes. You're likely to know at least one or more of the famous names on this list of notorious tax cheats.

Cities with the Lowest Tax Rates

The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Add a Comment

*0 / 3000 Character Maximum