Sales Tax

[Rick757]

I have sales tax deductions of $5600.  New car plus itemized sales taxable purchases.  When I enter $5600 in Turbo Tax it does not change my federal tax.  Why?

[xmasbaby0 · Accepted solution]

Sales tax is an itemized deduction.  Unless you have enough itemized deductions to exceed your standard deduction, the sales tax will have no effect on your tax due or refund.

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

[markpyke]

Yes, its understood that the sales tax deduction is only available to those that itemize; and for married/joint returns, the threshold is $24,400.  As I do have deductions > 24.4 K, i will be itemizing.  And I would like to include the sales tax deduction.  However, my version of Turbo Tax keeps stating that :

"You've done a great job starting your taxes early, but the IRIS is still working on finishing up the sales tax deduction area.  We expect this form to be ready for you on 01/20/2020".  

Its now March 20, 2020, and I keep getting the same message.  Can someone who works for Intuit tell me how to include my deduction for sales taxes in my 2019 return.  I already went through an IRIS website sales tax deduction calculator, and I know what the amount will be.  I can I include in my turboTax return???

Thanks in advance for any help.

[Bornum]

@markpyke, thank you for your comment. I suspected the same issue with my sales tax deduction and discovered that Turbo Tax is not allowing my "Specific Items" deduction even though they are clearly within the definition of what is allowed. Have you heard back from Intuit?

[Bornum]

@markpyke Hi. I resolved my issue. I learned that, "The program does not include the sales tax on items if the actual amount entered is a dollar or more different than the cost times the total state and local rate." Maybe this will resolve your issue as well.

[BrianAYurkiw1]

When Itemizing sales tax payments in 2019 ... Can I include sales taxes paid in a different country (Canada) and in states other than the one I live in?

[KrisD15]

You can include taxes you paid in other states if you are using actual taxes paid or made a large purchase outside the state in which you live. 

No, sales tax paid in a different country cannot be included. 

You may only claim a deduction or credit for foreign taxes paid on foreign earned income.

[dasalt1961]

Hi, I am having a bit of a different issue.  I did a home remodel, and paid substantially more sales tax than the Turbo Tax calculated amount of $2748.  However, when I enter the full amount (over $6500) into the program, my taxes due do not change.  Turbo Tax does show the  sales tax deduction in the summary page.  Is there a limit to the sales tax deduction allowed?  FYI, since I live in Texas, our federal return isn't due until June 15.  

[dasalt1961]

I figured it out. There is a cap on total tax deductions of $10,000 (if filing jointly) for all state and local taxes. (lines 5-7 on Schedule A)