Tax Answers

February 23, 1994

Here are answers from members of the Maryland Association of Certified Public Accountants to readers' tax questions. The Sun will publish answers through April 15.

Q: Is the sales tax on an automobile deductible as a personal property tax because it is based on the value of the car?

A: No. For a tax to be deductible as a personal property tax, it must meet all of these criteria:

1: The tax is charged on personal property.

2: The tax is based only on the value of the property.

3: The tax is charged on a yearly basis.

Although a sales tax meets two of the three criteria, it is a one-time-only charge and thus fails on the third. If the auto is used for business, the sales tax paid on its purchase is added to the total cost basis.

Q: Who is responsible for making sure the information that's published on your W-2 is correct -- the employer or the employee?

A: The employer must correct your Form W-2. According to Internal Revenue Service instructions for Form 1040, line 58A, "If any one employer withheld more than [the correct] Social Security tax or Medicare tax, you must ask that employer to refund the excess to you. You cannot claim it on your return."

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary. Consult with a tax adviser for specific advice.

Readers may submit questions by phone, mail or fax. Selected questions will be answered in The Sun and The Evening Sun.

To ask a tax question by phone, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford County 836-5028, and in Carroll County 848-0338. Using a touch-tone phone, enter 6120 after the greeting.

Written queries may be sent to TAX QUESTIONS, The Baltimore Sun, Business News Department, 501 N. Calvert St., Baltimore 21278. Fax questions to The Sun's Business News Department at (410) 783-2517. Callers are encouraged, but not required, to leave their names and phone numbers should questions need to be clarified. Names will not be published. Questions will not be answered by phone.

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