One may only deduct either sales tax or income tax, whichever is higher. So, deducting sales tax is usually only a benefit for someone who resides in a state that does not charge an income tax. TurboTax will calculate the best option for you so all guess work is eliminated.
Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming don't levy an income tax.
However, depending on your specific tax situation, either could be most beneficial. You may enter the sales taxes paid on major items and TurboTax will see if that outweighs the alternative deduction (income taxes).
To enter sales tax in to TurboTax:
the Federal Taxes tab at the top
Or the Personal tab if using Home & Business
- Then, Deductions
Desktop users may need to click I'll choose what I work on here
Scroll down to the
"Estimates and Other Taxes Paid section"
Online users may need to click Show more to expand the section
- Next to "Sales Tax" click Start/Update/Revisit
- Follow the interview screens to input this information
For more information on which deduction is right for you, please see this TurboTax FAQ:
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