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), 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
-I'll choose what I work on
-Scroll down to:
--Estimates & other taxes
paid
-Sales tax