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tk01kj
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Deduction questions rental income, sales tax, job expenses from W-2

1. I work in WA state as a Software Engineer and occurred a lot of unreimbursed job expenses. I thought the Job Expenses for W-2 Income deduction was removed since 2018, so why do I see this section under Deductions & Credits?

 

I own a rental property. 

2. Which fields in Rental Properties and Royalties (Sch E) do I enter Condo HOA Fees, Appreciation, and Depreciation expenses?

3. If I already entered Real Estate taxes and Mortgage Interest from Form 1098 in Rental Properties and Royalties (Sch E) under Wages & Income, do I need to enter those again in Property (Real Estate) Taxes and Mortgage Interest and Refinancing (Form 1098) sections under Deductions & Credits (which both show a Not Started status) or areProperty (Real Estate) Taxes and Mortgage Interest and Refinancing (Form 1098) sections under Deductions & Credits only for personal property, not rental property?

 

4. If I made major purchases in WA state in 2019, at what point is it wiser for me itemize all the purchases to calculate the maximum amount of sales tax I can deduct?

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1 Reply

Deduction questions rental income, sales tax, job expenses from W-2

1. Information flows from your federal return to the state return, and some states still allow certain job-related expenses as deductions.  So the software allows you to enter them during the interview for your federal return, although they will not be deductible on your federal return.  In your case, you are in a state with no state income tax, so entering any job-related expenses is just a waste of your time and effort if you are a W-2 employee.

 

4. Since you have no state income tax,  you may be able to use your state sales tax as an itemized deduction.  You will still be subject to the $10,000 cap on the total of all state and local taxes.

SALES TAX

You can enter the sales tax you paid  in 2019 by going to Federal>Deductions and Credits>Estimates and Other Taxes Paid> Sales Tax.  

 

Sales tax is an itemized deduction.  If your state has a state income tax, you have to choose between using the deduction for your state tax paid OR the sales tax deduction, whichever is higher.  The TT process will suggest one or the other as you prepare your return.

 

“Major purchases” that you can enter for the sales tax deduction include:

Motor Vehicles (cars, trucks, motor homes, RV’s, sport utility vehicles and off-road vehicles

Aircraft or boats

Mobile homes

Manufactured housing

Building materials for major home improvements

You cannot deduct: furniture, jewelry, home electronics such as TV’s or computers

https://ttlc.intuit.com/questions/1901222-which-deduction-should-i-choose-sales-tax-or-income-tax

https://ttlc.intuit.com/questions/2566624-how-much-sales-tax-did-i-pay-last-year

https://ttlc.intuit.com/questions/3148443-how-do-you-define-major-purchase-or-major-item-for-the-sal...

https://ttlc.intuit.com/questions/1900791-how-do-i-find-my-local-sales-tax

 

https://ttlc.intuit.com/questions/2566624-how-much-sales-tax-did-i-pay-last-year

 

 

**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.**
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