Yes, you will include the sales tax on these improvements under the "building material" category under the major purchases under sales tax. This additional major purchase is only allowed for materials used on a personal residence (any rental improvements will be included under the rental section)
A few things to remember about this deduction, you will only get this extra deduction if:
- The sales tax rate on this major purchase needs to be the same rate as your state's general sales tax rate.
- You are taking the state's sales tax deduction as opposed to the state's income tax deduction.
- You itemize on your return.
To enter your sales
taxes and major purchases in TurboTax Online or Desktop, please follow
these steps:
- Once you are in your tax
return, click on the “Federal Taxes” tab ("Personal" tab in
TurboTax Home & Business)
- Next click on “Deductions
& Credits”
- Next click on "jump to
full list" or “I’ll choose what I work on”
- Scroll down the screen until
to come to the section “Estimates and Other Taxes Paid ”
- Choose "show more",
then Sales Tax (start/update/revisit)
- Choose - continue to sales
tax and choose "Easy Guide"
- If your state sales tax
information is already entered you will need to edit it to enter your
major purchases information.
- On the screen that says
Major Purchase - select "yes"
- Enter your building material
information and sales tax here on the next screen. (screenshot)
As noted above: you are only allowed the major
purchase additional sales tax amount if the sales rate you used for your
general state sales tax rate is the same sales tax rate on your major purchase.
So if you used a 8%
general sales tax rate for your state, this would have to be the same sales tax
rate for your building material purchases. Just make sure that when you enter this information
under the "Major Purchase" section, that your sales tax divided by
your cost is your general state's sales tax rate.
