Sales Taxes Paid Deduction

If you itemize your deductions, you can deduct either of the following:

• State and local income taxes you paid; or
• State and local sales taxes you paid.

After you enter information for both of these income and sales taxes amounts, Turbo tax will select the one that gives you best tax break.

For most people, the state and local income taxes paid usually gives them the higher deduction, but for others, the sales tax deduction may give them a greater benefit, for example:

• Residents of states that don't collect state and local income tax (Alaska, Florida, Nevada,  South Dakota, Texas, Washington, and Wyoming)
• Taxpayers who made major purchases during the tax year that were subject to sales tax (we're talking major as in cars, boats, airplanes, RVs, etc.)
• Residents of states with a high sales tax rate. More information

TurboTax will help you calculate the sales tax deduction amount, and will let you know if it results in a deduction higher than your state and local income tax.

Sales tax varies from state-to-state and by region or locality. You can usually find the sales tax rate for your locality when you visit your state's public web site.  You can also visit the Federation of Tax Administrators web site which lists all the state tax agency web sites.

If you are itemizing your deductions and want to enter sales taxes paid:

In TurboTax Online:

1. Select the Tools button in the upper right-hand portion of the screen. 
2. Select Topic Search. 
3. When the window opens, type "sales taxes paid" into the box, select the item, and then select Go.
4. Follow the on-screen instructions to enter your sales taxes paid information.

In TurboTax Desktop or CD/Download version:

1. Enter your cursor into the search box in the upper right-hand portion of the screen. 
2. Type "sales taxes paid" into the box, select the item. 
3. Follow the on-screen instructions to enter sales taxes paid information.