Anyone deduct sales tax for federal income tax return?

[AmyAnne]

We just moved to a state that does not have a state income tax, so not sure that it will be worth it for us to itemize this coming year (2016). I have read that as an alternative, we could deduct state sales tax but I haven't found a lot if info about how that actually works. Anyone here with expertise or experience?

 

[supersnoop]

You'll look up a standard amount from a table, or you can enter in actual amounts if you kept all you're receipts. You'll have the option to add in some large purchases, like an automobile.

 

[MillauFr]

I always deduct the sales tax because there is no state income tax in Washington State and the sales tax is 9.6%. I use Turbo Tax and just answer the questions that it asks. I got a $2,000+ deduction last year for sales taxes.

 

[Marionnette]

We just moved to a state that does not have a state income tax, so not sure that it will be worth it for us to itemize this coming year (2016). I have read that as an alternative, we could deduct state sales tax but I haven't found a lot if info about how that actually works. Anyone here with expertise or experience?

We have a state income tax in PA, but I have deducted sales tax (6%) on some returns when we made made renovations to the house. This past year, I purchased all new appliances for the kitchen and a new car. You betcha that I am deducting the sales tax this April!

 

[JWigs]

We also live in WA state where there's no state income tax so we deduct sales tax as well. The only thing is if you bought big things (appliances, cars, etc) then you'd want to make sure you keep those receipts but most years we take the standard which you don't have to provide receipts for.

 

[okeydokey]

I thought they did away with that exemption.

 

[Disney_1derland]

There's a calculator on irs.gov for this purpose.

 

[Claire&TheBoys]

I live in Florida, which also does not have a state income tax, so we are able to deduct sales taxes. There's a table to use to determine your base amount for your state, then there are adjustments based on your extra county/city taxes. You can add in the tax from large purchases like vehicles, also.

Keep in mind that the sales tax deduction is part of Schedule A for itemized deductions, so if it's not in your favor to itemize, you don't get that deduction.

 

[brertoad]

I believe you'd have to exceed the standard deduction before you'd even be able to deduct the sales tax. For us, it's not worth the time or effort anymore because we just take the standard deduction. I used to do this each year until we fell short in deductions.

 

[NinaBella]

An ex-coworker of mine had an app on his phone to track sales tax (we are in Florida). He would snap a picture of his receipts into the app. Then he said when it came time to taxes he could import/export the data for his tax return. I do not recall the name of the app. We use the same lady at H&R block for the last 10 years and she says it's not worth it for us to itemize. I use to do our own taxes.

 

[amcnj]

This was basically a way for residents of states without income tax to have an additional itemized deduction, since they have no state income tax to deduct. So it is not instead of itemizing, it is a line item on the itemized deductions form (schedule A) and the choice is between putting your state income tax or state sales tax on schedule A. If you live in a no state income tax state, then you would be using the state sales tax figure. For others, they need to determine if the state income tax or sales tax amount is higher. Of course there is still the overall decision whether to use the itemized deductions or the standard deduction, choosing whichever route gives you the greatest overall deduction.

As said previously, there are set amounts to deduct (a calculator can be found on the IRS site), unless you have the receipts to total up and enter a figure yourself. You can also add on for unusual, large purchases, such as cars, to the suggested sales tax amount as that original figure does not account for "big ticket " purchases since they typically do not occur every year.