The sales tax deduction is an option on the Schedule A for itemized deductions which is calculated based on the amount of income you received during the year.
If your state does not have a state income tax, then it may be beneficial for you to complete this section for a deduction on the taxes section of your Schedule A.
Please refer to the additional information at the following link:
Sales tax or state taxes paid on Sch A which is best
For most people who itemize, the state and local income tax deduction gives them a bigger tax break. However, the sales tax deduction may be more advantageous for taxpayers who:
- Are residents of Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming
- Made a major purchase and therefore paid a lot of sales tax
- Made frequent or substantial purchases in a state with high sales taxes
We’ll figure this out for you in Deductions Credits and let you know which deduction saves you the most money based on your situation.
How this deduction changed starting in 2018
The SALT deduction (which is either state/local income tax plus property tax OR sales tax plus property tax) is capped at $5,000 for married couples filing separately and $10,000 for all other filers. In 2017 and earlier, there was no cap.
Taxpayers must still itemize to get this deduction — that part hasn't changed.
Related Information:
