Congress extended the provision to deduct state and local general sales taxes for 2006 AFTER Schedule A forms and instructions were already printed up. If you itemize, and you live in a state where there are no state income taxes, this is a particularly nice deduction; if you live in a State where there are state/local income taxes, you can choose which deduction you want. If you are eligible to take the sales tax deduction, it goes on line 5 of Schedule A ("State and local income taxes"). I'm posting about this because I almost overlooked it myself. I'm retired, and it still increased my deductions by more than $1000.

Now if each of you who would have overlooked this will just send me 10% of the additional amount you saved on your taxes, I'll be happy!

Here is a link that might be useful: Publication 600