Is there a cap for the state sales tax deduction or is there an artificial cap in Turbo Tax - refund doesn't change when sales tax greater than $40,000 is entered?

My federal refund does not change when I enter sales tax paid in excess of $40,000. My understanding is that all WA state sales tax is deductible if I have receipts to prove payment of sales tax. If so, it seems that the federal refund should increase with increased state sales tax paid.

991

Level 7

Jun 6, 2019 10:42:08 AM

If you are subject to Alternative Minimum Tax, your deduction for state and local taxes is capped or eliminated altogether.

Level 6

Jun 6, 2019 10:42:10 AM

There is not a cap on your sales tax deduction. However, if you make too much money, there may be a phase-out (reduction of) your total itemized deductions based on your adjusted gross income.

Click this TurboTax article Tax Changes You Need to Know for 2017 for more information.

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Is there a cap for the state sales tax deduction or is there an artificial cap in Turbo Tax - refund doesn't change when sales tax greater than $40,000 is entered?