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New Member
posted Jun 4, 2019 9:20:40 PM

When calculating the sales tax deduction for active duty military, do I use my home of record (TX) or the state where I live (VA). And what if we purchased new cars in VA?

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3 Replies
New Member
Jun 4, 2019 9:20:42 PM

You will only be able to use your state of residence (your home of record - TX) when taking the sales tax deduction on your income tax return. Since the car was purchased in VA, you will not be able to include this car purchase as a major purchase under the sales tax deduction section.

Returning Member
Feb 20, 2021 1:35:30 PM

Follow-on related question, I am active duty military stationed overseas (Germany), should I use my state of residence (FL) for the sales tax deduction?  If not, how can I remove the sales tax deduction after it has been applied to my federal income tax return?

Expert Alumni
Feb 20, 2021 2:03:21 PM

Yes, use FL for calculating your sales tax deduction. Using FL as your basis for calculating a U.S. sales tax deduction is consistent with the intent of the U.S. tax code.

 

As an active-duty military member, your income is treated as earned in FL and you should treat any income-related deductions (i.e. sales tax) as if they were also sourced in FL.

 

The IRS doesn't have any way of calculating the U.S. equivalent of the German sales tax (VAT)  - their tax rates and currency cannot be easily translated to a U.S. equivalent sales tax.