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bobchristiansen
Level 1

fl state sales tax deduction

I have itemized all the expenses and sales taxes paid for construction of a new home and TurboTax doesn't allow the deduction. Why?

 

2 Replies
xmasbaby0
Level 15

fl state sales tax deduction

Not sure what construction "expenses" you tried to use.  Sales tax only affects your refund or tax due if you have enough other itemized deductions to exceed your standard deduction.  

 

STANDARD DEDUCTION

Many taxpayers are surprised because their itemized deductions are not having the same effect as they did on past tax returns.  The new higher standard deduction and the elimination of certain deductions, as well as the cap on state and local taxes have had a major impact since the new tax laws went into effect beginning with 2018 returns.

 

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach.  The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.

 

Your standard deduction lowers your taxable income.  It is not a refund. 

 

2019 Standard Deduction Amounts

 

Single $12,200   (+ $1650 65 or older)

Married Filing Separate  $12,200   (+ $1300 if 65 or older)

Married Filing Jointly $24,400   (+ $1300 for each spouse 65 or older)

Head of Household $18,350  (+ $1650 for 65 or older)

 

Look on line 9 of your 2019 Form 1040 to see your itemized/standard deduction amount

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
TomD8
Level 15

fl state sales tax deduction

Most expenses associated with construction of a new home aren't deductible.  This website has a good discussion about it:

https://finance.zacks.com/tax-writeoffs-building-new-home-1178.html

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

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