Which deduction should I choose, state and local income tax or sales tax?
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 $20,000 for married couples filing separately and $40,000 for all other filers.
Here's an example that compares the changes:
2025 and later
State and local tax (or sales tax) = $7,500
Property tax = $5,000
Vehicle registration = $500
Total SALT = $13,000
Deductible amount = $20,000 (Married Filing Separately) or $40,000 (all others)
2018 through 2024
State and local tax (or sales tax) = $7,500
Property tax = $5,000
Vehicle registration = $500
Total SALT = $13,000
Deductible amount = $5,000 (Married Filing Separately) or $10,000 (all others)
