TurboTax --> Federal Review --> Detailed tax Breakdown

[gulsheenk]

Hello, 

I  had purchased a car in 2023 and paid sales tax.  I had included that as a separate line while entering sales tax within Turbotax.  However, when I go to TurboTax --> Federal Review --> Detailed tax Breakdown, it shows "You Entered" <the amount I entered> and "You are allowed" "0" .  Why is that so?

Also, it shows certain amount in "State and local Taxes" as you entered, but I am not sure where that's coming from.  It does match or add up to entries in "Wages & Income" and "Deductions & Credits". Please advise. 

Thanks!

Gulsheen

[VolvoGirl]

You get to deduct either the state income taxes paid which are state withholding, a state tax due you paid in 2023 and any estimated payments you paid in2023 and local taxes paid  OR state sales tax.  The state income tax paid is limited to 10,000 (5,000 MFS).  Maybe your income tax paid is more than the state sales tax.

[gulsheenk]

@VolvoGirl : I live in WA state and we do not have any state or local taxes. My W2 does not have any state or local tax.  I have double checked under Wages & Income --> Wages and Salary and it shows only Federal Tax Withheld.   I am not sure how turbo tax software is picking up State and Local Taxes. 

I have a rental in Michigan and this year it's in loss mainly because of water damage (due to pipe burst) out of pocket expenses.  I pay property tax and that does not add up to the tax that is displayed under 

 TurboTax --> Federal Review --> Detailed tax --> State and Local Taxes.  Please help me figure out this. 

I had purchased a car and that line item is separate.  

@DanaB27 for visibility and help please. 

Best!

Gulsheen

[Vanessa A]

The property taxes that you are paying in Michigan are on a rental, so they would not be part of your itemized deductions, they would be part of your rental expenses.

The sales tax deduction is a calculation that includes your total income for the year and the sales tax rate for your home address.  You can use this calculator from the IRS to see how your income changes your sales tax deduction. 

Standard versus Itemized Deduction

[gulsheenk]

@Vanessa A 

That's correct, The property taxes that you are paying in Michigan are on a rental are under rental expenses.  

I followed the IRS calculator that you shared in the message, which states that I am eligible for $12K tax deduction, but allowed is $10K, which is fine.  

However, my original question is still unanswered.  Why am I seeing 5-figure State and Local Taxes under

 TurboTax --> Federal Taxes -->Federal Review --> Detailed tax --> State and Local Taxes when here is no WA state or City of Seattle tax.  Please advise. 

[AmyC]

State and local taxes consist of:

Sales tax

Property tax

Real Estate tax

My guess would be that you pay property tax on either a house or cars to create the SALT figure.