tax question

2 replies
55 views

I live in California but I am remodeling a house in Arizona i will eventually rent. I paid $7081 in sales tax in Arizona how and where do i file for this.

Hal_AlAnswer

Level 15

Expert Reviewed

Q. I paid $7081 in sales tax in Arizona how and where do I file for this?

A. Nowhere, this year.

The sales tax paid is included in the cost of the remodel. The total remodel cost will be entered as a depreciable asset in the year the house is available to rent out.

General discussion on the personal sales tax deduction.

You are allowed to deduct state & local income taxes OR sales tax; but not both. This provision was added primarily to allow a deduction for people in states without income tax. Sometimes, with a big purchase (like a car or home [residence] remodel), you may be better off deducting sales tax even if your state has an income tax. Enter both, under deductions, and TT will calculate the best option. If you don't have all your receipts (and hardly anybody does), you are allowed to use tables (built into TT from IRS Pub 600) based on income & exemptions, You can then add major purchase sales tax to the table amounts. Neither is deductible if you use the standard deduction instead of itemizing.

In TurboTax, enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Estimates & other taxes paid

-Sales tax

Sales tax (and state & local income tax) are itemized deductions. To get any benefit, the total of all your itemized deductions must exceed your standard deduction ($14,600 Single, $29,200 Married filing jointly)

Hal_Al

Answer

Level 15

Expert Reviewed

Q. I paid $7081 in sales tax in Arizona how and where do I file for this?

A. Nowhere, this year.

The sales tax paid is included in the cost of the remodel. The total remodel cost will be entered as a depreciable asset in the year the house is available to rent out.

General discussion on the personal sales tax deduction.

You are allowed to deduct state & local income taxes OR sales tax; but not both. This provision was added primarily to allow a deduction for people in states without income tax. Sometimes, with a big purchase (like a car or home [residence] remodel), you may be better off deducting sales tax even if your state has an income tax. Enter both, under deductions, and TT will calculate the best option. If you don't have all your receipts (and hardly anybody does), you are allowed to use tables (built into TT from IRS Pub 600) based on income & exemptions, You can then add major purchase sales tax to the table amounts. Neither is deductible if you use the standard deduction instead of itemizing.

In TurboTax, enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Estimates & other taxes paid

-Sales tax

Sales tax (and state & local income tax) are itemized deductions. To get any benefit, the total of all your itemized deductions must exceed your standard deduction ($14,600 Single, $29,200 Married filing jointly)