Enter my Sales Tax from Receipts

[TaxLu]

Hi,Hope all is well. 

Did I read the sales tax section right? Did it say that if I have my receipts I could add up all the sales tax for a deduction OR let Turbo estimate it for me? Because I have a bag with 95% of my printed receipts, the rest or digital, or credit card statement.

Note: I live in a state that doesn't file State taxes, I only file federal.

Special thank you to everyone that knows their stuff and helps in this community!

[fanfare]

Adding up hundreds of sales tax receipts is tedious.

That's why IRS gives you a default sales tax deduction based on your income.

Receipts must be kept available if IRS asks to see them.

@TaxLu 

[xmasbaby0 · Accepted solution]

You do have a choice.  You can add up all of those receipts---which will be very tedious.  Or you can let the software do an estimate based on your income.  Unless you have enough other itemized deductions to exceed your standard deduction, you could be doing a lot of work for nothing though.  The sales tax will have no effect on your tax due or refund unless you are also entering enough itemized deductions like mortgage interest, etc. to exceed your standard deduction.

SALES TAX

You can enter the sales tax you paid in 2022 by going to Federal>Deductions and Credits>Estimates and Other Taxes Paid> Sales Tax.  

Sales tax is an itemized deduction. “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

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. (Only the amount that is MORE than 7.5% of your AGI counts)   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.  You will see your standard or itemized deduction amount on line 12 of your 2022 Form 1040.

2022 STANDARD DEDUCTION AMOUNTS

SINGLE $12,950  (65 or older + $1750)

MARRIED FILING SEPARATELY $12,950  (65 or older + $1750)

MARRIED FILING JOINTLY $25,900  (65 or older + $1400 per spouse)

HEAD OF HOUSEHOLD  $19,400  (65 or older +$1750)

Legally Blind + $1750