topic Do expensive vacations count as Major Purchases? in Retirement tax questions

Do expensive vacations count as Major Purchases?

neilp11 — Thu, 10 Apr 2025 13:52:56 GMT

My wife and I went on a very expensive vacation (>$6000). Can we include that as a "major purchase" for sales tax computation?

Re: Do expensive vacations count as Major Purchases?

Vanessa A — Thu, 10 Apr 2025 19:30:48 GMT

Yes, if you itemizing and you are using the actual sales tax method you can include the sales tax on your vacation. Anything you purchased that was a large purchase counts as a major purchase if you paid sales tax on it. It can be a luxury item, a practical item or anything in between.

If you are using the optional method then you cannot add the sales tax for major purchases unless they are specified on page 6 line 7 of the instructions., such as a boat, car, or home. The amount you can claim is based on the table using your income and location. Schedule A Instructions See page 12

In addition, you can only claim this if you are itemizing your return. This also replaces the State and Local Income tax deduction. You cannot claim both sales tax and income tax, it is either one or the other.

Itemized expenses include mortgage interest, gambling losses up to winnings, charitable contributions, state and local taxes up to $10,000, medical expenses in excess of 7.5% of your AGI and casualty and losses in excess of 10% of you AGI with the first $100 not counting towards the loss.

Then your total itemized expenses would need to be greater than your standard deduction below in order to benefit from your expenses.

The 2024 Standard Deductions are as follows:

Married Filing Joint (MFJ) $29,200
Married Filing Separate (MFS) $14,600
Head of Household (HOH) $21,900
Single $14,600

Blind or over 65 and MFJ or MFS add $1,550

Single or HOH if blind or over 65 add $1,950

Standard versus Itemized Deduction

(Edited 4/10/025 @ 11:37AM PST) @neilp11

Re: Do expensive vacations count as Major Purchases?

Opus 17 — Thu, 10 Apr 2025 15:21:33 GMT

If you are using the actual sales tax method where you add up your sales tax from your receipts, you can include all purchases on which you pay the standard sales tax charged in the location where the travel occurred. You can't include special taxes, like a special hotel tax on out of town visitors, or all the special taxes on air fare. Just the standard local sales tax rate, if you can prove it.

If you are using the standard method, where the IRS gives you a sales tax allowance based on your income and where you live, then no, you can't include a vacation. There is no such thing as a "major purchase" addition to the standard method. The law specifically states that the only thing you can add to the standard method is the purchase of a motor vehicle, airplane, a home, or substantial renovation to a home.