If you're itemizing, you get to choose between deducting your state and local income taxes or your state and local sales taxes. You can't claim both and you can't claim either one if you're taking the Standard Deduction.
There are two methods for coming up with the amount of sales taxes you paid during the year: add up all your receipts (actual expenses) or use the predetermined IRS amount which is based on your sales tax rate. If you take the predetermined amount, you get to add the sales taxes you paid for major purchases, like a car.
If you’re taking the sales tax deduction, here’s how to enter the sales tax you paid:
- Open or continue your return
- Search for sales tax and select the Jump to link in the search results
- When asked how you want to enter your sales tax info:
- Choose EasyGuide if you want us to walk you through it
- Choose Enter All My Receipts if you’ve saved all of your receipts and can give the grand total
For tax years 2018 through 2025, the SALT deduction (which includes sales tax) is capped at $10,000. That means if the combined total of your sales tax, real estate tax, and personal property tax amounts to $15,000, you can only deduct $10,000 maximum.
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