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ravenside
New Member

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

 
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Accepted Solutions
DoninGA
Level 15
Intuit Approved!

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

It can if the sales taxes paid for the major purchase is within these guidelines - 

 

You can also claim the state and local sales tax amounts you paid for big-ticket items such as:

  • Motor vehicles (motor homes, recreational vehicles, sport utility vehicles, and off-road vehicles)
  • Aircraft or boats
  • Your home, substantial home addition, or major home renovation if:
    • Your state or locality charges tax on the sale of a home, the cost of a substantial home addition, or the cost of a major home renovation; or
    • You purchased and paid sales tax on the materials to build a home, build a substantial home addition, or perform a major home renovation.

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10 Replies
DoninGA
Level 15
Intuit Approved!

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

It can if the sales taxes paid for the major purchase is within these guidelines - 

 

You can also claim the state and local sales tax amounts you paid for big-ticket items such as:

  • Motor vehicles (motor homes, recreational vehicles, sport utility vehicles, and off-road vehicles)
  • Aircraft or boats
  • Your home, substantial home addition, or major home renovation if:
    • Your state or locality charges tax on the sale of a home, the cost of a substantial home addition, or the cost of a major home renovation; or
    • You purchased and paid sales tax on the materials to build a home, build a substantial home addition, or perform a major home renovation.

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Thimble
Level 1

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

okay how do I get to that section in turbo tax?

BillM223
Expert Alumni

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

Do a Search (upper right) for sales tax and click on the jump-to result. (Mac software users should look for this in the Topic List)

 

Go through the sales tax interview, and eventually you will come to the screen that DoninGA mentions above about the major purchases.

 

This is reported (if not limited) on Schedule A.

 

 

 

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el1668
Level 1

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

In terms of timing for deducting sales tax for home improvement, let's say we signed a contract to build a new sunroom addition at the end of the year and paid a small deposit, do you deduct the sales tax in the year you sign the contract or do you deduct the sales tax in the year the money is paid to the builder or when it is complete?

JohnB5677
Expert Alumni

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

As an individual you would keep your accounts on a "Cash Basis" Cash Basis Definition (investopedia.com).  Therefore, you would claim the sales tax in the year it was paid.

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el1668
Level 1

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

Hi - sorry I just want to get a clear answer since I had posted this in another thread and got a different answer from @MarilynG1 .

 

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-unfortunately-no-you-can-not-...

 

 

DawnC
Expert Alumni

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

You can deduct the sales tax (in the year they were paid) on a home renovation or construction if all of these conditions apply:

  • You're itemizing.
  • You're taking the sales tax deduction, as opposed to the state/local income tax deduction.
  • The tax rate is equal to your state's general sales tax rate.
  • You (or your contractor acting as your agent) purchased the building materials and paid the tax.

Related Information:

  1. A home (including a mobile home or prefabricated home) or substantial addition to or major renovation of a home, but only if the tax rate was the same as the general sales tax rate and any of the following applies.
    • Your state or locality imposes a general sales tax directly on the sale of a home or on the cost of a substantial addition or major renovation.
    • You purchased the materials to build a home or substantial addition or to perform a major renovation and paid the sales tax directly.
    • Under your state law, your contractor is considered your agent in the construction of the home or substantial addition or the performance of a major renovation. The contract must state that the contractor is authorized to act in your name and must follow your directions on construction decisions. In this case, you will be considered to have purchased any items subject to a sales tax and to have paid the sales tax directly.    They are deductible in the year they were paid.   If he has not purchased them yet, you don't know how much tax is imposed.    There is no deduction for the deposit you paid.   When the contractor pays the tax, you can claim it.    @el1668 @el1668
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el1668
Level 1

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

Thanks - I understand what qualifies but my question is on timing of payments. Do I deduct the sales tax of the entire project based on when the contract is signed or when payments are made, assuming that the payments cross two years? The answer above says to take the deduction when cash goes out, but then I got another answer saying to take it entirely when the contract is signed.

DawnC
Expert Alumni

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

I expanded the answer above.   The contract must state that the contractor is authorized to act in your name and must follow your directions on construction decisions. In this case, you will be considered to have purchased any items subject to a sales tax and to have paid the sales tax directly.    They are deductible in the year they were paid.   If he has not purchased them yet, you don't know how much tax is imposed.    There is no deduction for the deposit you paid.   When the contractor pays the tax, you can claim it.    @el1668 

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el1668
Level 1

Can the $1,846.52 in sales tax for a home improvement in 2019 be added to my sales tax deduction?

Thank you - sounds like based on when cash goes out of my account.

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