TurboTax FAQ
TurboTax FAQ
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How to Include Nontaxable Income to Calculate Your Sales Tax Deduction

Nontaxable disability income and certain other nontaxable income can be reported in TurboTax to increase your sales tax deduction, lowering your overall tax liability. Do not include income you have already reported as taxable income. The following are some examples of nontaxable income you can include for calculating the sales tax deduction:

  • Child support
  • Worker's compensation
  • Military basic quarters and subsistence allowances
  • Tax-exempt interest
  • Public assistance payments
  • Economic recovery payments
  • Nontaxable Social Security and Railroad Retirement benefits
  • Nontaxable combat pay
  • Veteran's disability pay for active service-related disabilities in the military or certain government services
  • Veteran's disability pay for combat-related injuries or illness

Adding nontax income for calculating sales tax deductions

In TurboTax, include your nontax income for calculating the sales tax deduction by:

  1. In the TurboTax search box enter sales tax and press the Enter key.
  2. Click the Jump to sales tax in the search results.
  3. At the Sales Tax and Income Tax screen, select Continue with Sales Tax.
  4. On the How do you want to enter your sales tax info? screen, select EasyGuide.
  5. Add any additional places you lived and click Done.
  6. Select Yes on the Nontaxable Income screen.
  7. Enter the amount of your nontaxable income and select Continue.
  8. We'll then choose the larger deduction for you.