If added on our house and sales tax paid of 116.85...
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New Member

If added on our house and sales tax paid of 116.85 why did it give us high state deduction?

This was a deduction for building materials for an awning, you are giving us sales tax deductions higher.
3 Replies
Level 15

If added on our house and sales tax paid of 116.85 why did it give us high state deduction?

What state? There are at least 37 possibilities here.

 

New Member

If added on our house and sales tax paid of 116.85 why did it give us high state deduction?

Arizona

 

Employee Tax Expert

If added on our house and sales tax paid of 116.85 why did it give us high state deduction?

  1. Yes, it is because Tax Cuts and Jobs Act signed into law in 2018 suspended some of the itemized deductions on Schedule A.  You may not have enough deduction to itemize, but claiming Standard Deduction was the best option for you. 
  2. After you entered the amount of the sales taxes, it increased your itemized by that amount but still did not qualify you for an itemized deduction. The amount of itemized deduction from your Federal return was transferred over to your state return, thus giving you an option to itemize your state return.

 

For example - Federal Return:

  • .Filing Status - Single
  • Standard Deduction - $12,000 
  • Total Itemized deduction - $10,000 including the taxes you added

On the scenario above, you didn't qualify to claim your itemized deductions because Standard deduction was more. The amount of your itemized deductions were transferred over to your state return even if you didn't itemize your Federal return.  On the above example, Standard Deduction was your option.

 

For example - State Return:(after sales tax added):

  • Filing Status - Single
  • itemized deduction - $10,200
  • Standard Deduction - $4537 (2020 California Standard Deduction)

On the second example, itemized deductions were more. 

See link, Why my refund won't increase, for additional information.

 

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