Question about itemized deduction, line 5a on Schedule A

[sankalp-money]

I live in WA state with no income tax. I'm doing itemized deduction this year and I wanted to claim sales tax deduction for 2024. This will go on Line 5a on Schedule A of Form 1040. I understand that it is capped as 10k max.

One option is this IRS Sales Tax Deduction Calculator (link). When I put in my family's income, 1 dependent, and my zip code it gives me the following

State Tax %, Taxes Paid: 6.5000%, $2,188.00

Local Tax %, Taxes Paid: 2.9751%, $1,001.46

which means I can deduct up to $3189 on line 5a.

However, a consultant friend whose help I have taken in the past tells me that I can claim only the state component $2188 on 5a, and he refers me to pg 15 of this IRS document which also states the same number 2188 (since its a standard for the income and number of dependents) - https://www.irs.gov/pub/irs-prior/i1040sca--2024.pdf

He says I can't claim the local tax component because only residents of MI, OH, PA, KT and NY can claim the local taxes. He didn't share any guideline doc that mentions these states.

I'm wondering if that's true at all? I couldn't find any doc that says otherwise or specifically mentions these five states.

[rjs · Accepted solution]

What your friend told you is not true. If your local sales tax rate is 2.9751% you can deduct the amount that you got from the IRS calculator.

In the Sales Tax Table that your friend referred you to on page 15 of the IRS Instructions for Schedule A, the 1 after the name of the state refers to Note 1 in the box at the bottom right. Note 1 says "Use the Ratio Method to determine your local sales tax deduction." You do that by using the State and Local General Sales Tax Deduction Worksheet on page 4 of the instructions. If you go through that worksheet, and if 2.9751% is your local sales tax rate, you will come up with local tax of $1,001.46 on line 6 of the worksheet, and a deduction of $3,189 on line 8.

I can't imagine where he got that list of 5 states, because they are not all treated the same for local sales tax. Michigan doesn't have any local sales taxes, so Michigan residents obviously cannot deduct local sales tax. KT is not a state. If it's supposed to be KY, Kentucky also does not have any local sales tax.

[sankalp-money]

That worksheet is a great reference! That'll settle things down.