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posted Jun 1, 2019 12:58:40 AM

Is it true that taxpayers in Texas can choose to deduct either state and local income taxes or state and local sales taxes on their federal returns?

I don't see a place on my Turbo Tax Delux for this. Can you help me please?

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1 Best answer
Level 15
Jun 1, 2019 12:58:40 AM

Sales tax is an itemized deduction.  If your state has a state income tax, you have to choose between using the deduction for your state tax paid OR the sales tax deduction, whichever is higher.  The TT process will suggest one or the other as you prepare your return.

“Major purchases” that you can enter for the sales tax deduction include:

Motor Vehicles (cars, trucks, motor homes, RV’s, sport utility vehicles and off-road vehicles

Aircraft or boats

Mobile homes

Manufactured housing

Building materials for major home improvements

You cannot deduct: furniture, jewelry, home electronics such as TV’s or computers

Go to Federal>Deductions and Credits>Estimates and Other Taxes Paid> Sales Tax. 

1 Replies
Level 15
Jun 1, 2019 12:58:40 AM

Sales tax is an itemized deduction.  If your state has a state income tax, you have to choose between using the deduction for your state tax paid OR the sales tax deduction, whichever is higher.  The TT process will suggest one or the other as you prepare your return.

“Major purchases” that you can enter for the sales tax deduction include:

Motor Vehicles (cars, trucks, motor homes, RV’s, sport utility vehicles and off-road vehicles

Aircraft or boats

Mobile homes

Manufactured housing

Building materials for major home improvements

You cannot deduct: furniture, jewelry, home electronics such as TV’s or computers

Go to Federal>Deductions and Credits>Estimates and Other Taxes Paid> Sales Tax.