Which deduction should I choose: sales tax or income tax?
The information in this article pertains to tax year 2017. Find out how tax reform legislation changes the 2018 deductions at How will tax reform affect my 2018 federal tax return?
For most people who itemize, the income tax deduction offers the bigger tax break.
But, the sales tax deduction will probably benefit you more if you:
- Don’t pay income tax in your state (Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming)
- Made a major purchase and paid a lot of sales tax
- Paid more in sales tax than income tax
- Lived in a state with high state and local sales tax rates
If we’re helping you with your taxes this year, we’ll figure this out for you in Deductions & Credits. You’ll see which deduction saves you the most money based on your situation.