Sch A Line 5 generates comparison between income tax ded. vs. sales tax

[cdshoffner]

On Schedule A Line 5 Turbo Tax compares the state income tax deduction with sales tax deduction, and selects whichever is greater, which it says is the income tax figure (supplied by TT).  Should the software allow this in Washington state, which has no income tax?  If not, how can it be corrected?

[CherylW · Accepted solution]

There must be something in that section--it's not just making up a number!

First, go to the W-2 input and make sure there's nothing in there:

1.       Click Federal on the left-hand side menu.

2.       Click Income across the top.

3.       Scroll down to Wages and Salaries and click Show more.

4.       Click Start or Revisit by Wages and Salaries.

Next, go to:

1.  Click Federal on the left-hand side menu.

2.  Click Deductions & Credits across the top.

3.  Scroll down to Estimates and Other Taxes Paid and click Show more.

4.  Click Start or Revisit by Other Income Taxes.

If you didn't pay any taxes or have any withheld, then this section should be clear.

Please post back to this thread if you have more questions.

[cdshoffner]

I might I have found a clue:  part of the 2016 federal refund was applied to our 2017 federal taxes.  It's entered on Line 65 of the 1040.  The same figure is transferred somehow to Sch A, Line 5a as a state/local income tax paid.  It shows up on Line 6 on the state/local tax deduction worksheet as an overpayment.  I don't know how to remove it.

[CherylW]

As WA residents, we're allowed to deduct sales tax.

We don't pay income tax, so the only figure on your Schedule A line 5 should be that for line b, general sales taxes.

If you work in another state (like Oregon) which has an income tax, that number may be greater than your sales tax which you could deduct, but if you work in WA, your sales tax deduction will be greater.

The above should be happening automatically, based upon your zip code and entry in boxes 16-20 of your W-2.

[cdshoffner]

Yes, that's exactly my point.  I don't understand why TT checked the income tax box (Line 5a) and entered an amount; all income and zip code is entered in WA.  I understand that Line 5 is an either/or choice.  Yet in WA there shouldn't be said choice because we have no inc. tax.  Yet somehow TT program is entering a figure anyway and choosing the inc. tax since it is greater than the sales tax figure.

[CherylW]

Do you pay income tax to another state?  You say there's a number in the box--where does it come from, if it's not income tax?  Is it a certain percentage of your income that's used for the sales tax calculation?

[cdshoffner]

We do not pay taxes in another state.  I do not know where the figure came from; so that is precisely the confusion.  It is not a percentage figure.  (The sales tax figure is calculated from the IRS tables after you input the tax rate.  It's a much lower figure.)