How does it arrive at a state income tax deduction when I live in a no-income tax state? I've always taken the sales tax deduction.

[RaifH]

You can take the income tax or the sales tax, whichever is greater. Even if your state does not have an income tax, you may be having local taxes withheld on your W-2 in Boxes 18-20 which would also count towards the income tax itemized deduction. 

You can also enter your sales tax information and TurboTax will automatically select the better deduction if you do itemize your deductions:

1. Open or continue your return
2. Search for sales tax and select the Jump to link in the search results
3. 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 total
4. If you choose EasyGuide you will need to enter the sales tax rate in the places you lived. You will also have the option of adding any major purchases. The system will then provide an estimate of sales tax paid based on the sales tax rate and your income.

The $10,000 tax limit applies to all state and local taxes withheld in 2021. In addition to the sales or income tax that you entered, it would include any property taxes paid in 2021. It would also include personal property taxes on vehicles.

[karak96]

Yeah, that's what's weird. I have no state or local withholding on my W2 (first thing I checked). It's the "Easy Guide" that told me I should choose the state and local option. It came up with a huge figure, too. Like $14,000. I cannot figure out where it is getting this number. I will hit the $10K limit either way, but I want my return to be accurate, and not get flagged for using a state and local deduction that I don't have.