The state and local deduction is 4,768 and the sales tax deduction is 1,765, however when I select the bigger deduction turbo tax defaults to the smaller deduction.

[MonikaK1]

You have the option of claiming either general state and local sales taxes or state and local income taxes as an itemized deduction to reduce your tax bill. If you choose to enter sales taxes in TurboTax, the program asks you to choose whether you want the sales tax, the state and local tax, or the higher of the two. See this help article for more information.

If your results are not as expected, return to the section to verify your choice. Also, check to see whether you are getting the standard deduction instead of itemized deductions. If using TurboTax Online, you can preview your return before filing to find out how your taxes were calculated. See here for details. You can also view the Tax Summary under Tools on the left-side menu in TurboTax Online. In the Desktop version, switch to Forms Mode by changing your View option at the top of the screen. I checked both versions and this function worked correctly in the test return I used.

The bulk of your state and local income taxes are usually reported on your W-2. If you've filled out your W-2 in your return, TurboTax has already compared your state and local taxes to an IRS estimate of your sales tax (based on your income) to estimate which would be the higher deduction for you. You can go through the Sales Tax Deduction section and see which gives you the biggest deduction.

In this section, you can either enter your actual expenses by selecting Enter All My Receipts and totaling all of your sales tax receipts for the year, or select to have TurboTax use sales tax tables from the IRS to estimate your sales tax deduction based upon your income.

If you choose to claim the deduction for sales tax, you can also claim the state and local sales tax amounts you paid for big-ticket items such as:

- Motor vehicles (motor homes, recreational vehicles, sport utility vehicles, and off-road vehicles)

- Aircraft or boats

- Your home, substantial home addition, or major home renovation if:

 a) Your state or locality charges tax on the sale of a home, the cost of a substantial home addition, or the cost of a major home renovation, or

 b) You purchased and paid sales tax on the materials to build a home, build a substantial home addition, or perform a major home renovation.

When entering sales tax items, you can only use your own state and local sales tax rate where you lived. If you paid a higher rate, for example, by buying a boat out-of-state, you can only include what the tax would have been using your state and local tax rate.

Note: You can't deduct sales tax for alternative minimum tax (AMT) purposes.

[Simpleton]

@MonikaK1 I don't think this is an answer. Whether I select the larger "State and local income tax deduction" or "The larger deduction (Recommended),"  it still displays the smaller number. (Which in our cases was the "Sales tax deduction" number.).

Interestingly, when I finish and select "Done with deductions" and review my results, on the summary page with 2024 and 2025 Deductions & Credits, it displays the larger "State and local income tax deduction" amount in the "Itemized deductions:" list.

Doesn't this mean that TurboTax is just displaying the "Sales Tax" amount incorrectly on the "Your 2025 Deductions & Credits" entry summary page?

Thanks!

[MonikaK1]

Yes, if the correct amount is shown on your return, then there may be an issue with the sales tax deduction screen. I do not see any open or confirmed investigations on that topic.

If you like, in order for us to troubleshoot this issue, you can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Desktop users:

1. From the black bar at the top of your screen, select Online
2. Click Send Tax File to Agent
3. Click Send on the message that pops up
4. TurboTax will create a "sanitized" copy of your return information with no personal info
5. Post the full token number here in this thread

Here are the instructions for TurboTax Online users: 

Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to review your file to see what you are seeing, and we can determine what is going on in your return and provide you with a suggested resolution.

@Simpleton