JamesG1
Employee Tax Expert

State tax filing

You are allowed to deduct either your state/local general sales taxes OR your state/local income taxes, but not both.

 

Does your state have a state/local income tax?  Does the state/local income tax paid exceed the state/local general sales taxes? 

 

View IRS Schedule A Itemized Deductions, line 5a.  Is the box checked which says you elect to include general sales taxes instead of income taxes?

 

Sales Tax Deduction Limits


For tax years 2018–2024, the total deduction for state and local taxes (sales tax + property tax) is capped at $10,000 ($5,000 if married filing separately). For the 2025 tax year, this cap increases to $40,000 ($20,000 for married filing separately), with potential phase-outs for high income. 

 

To claim this, you must itemize, which means your total itemized deductions must exceed the Standard Deduction to provide a tax benefit

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