How much sales tax can i write off

State and local income taxes generally include:. State and local income taxes withheld from your wages. Estimated income taxes you paid to state or local governments during the year. State and local income taxes you paid during the year that were actually for a prior year.

Mandatory contributions to state benefit funds that protect against lost wages certain states only. Compare what you paid in sales tax for the year to what you paid in state, local and foreign income tax for the year. Then deduct the larger of the two amounts. Look at where you live. The same goes for people in high income-tax states, Riker says. Conversely, if you live in a state with no income tax, the sales tax deduction will probably be the better choice.

Reflect on your life. Sounds serious, but all this means is that if you recently made some big purchases — new appliances, a car, travel or lots of furniture, for example — you may have paid a lot of sales tax during the year. That could easily swing the pendulum in favor of taking the sales tax deduction.

Likewise, if you started making a lot more money, you may have paid a lot more state income tax during the year, which means deducting your state and local income taxes might be the better choice. Learn how to save money , from adjusting daily and monthly habits to making long-term changes.

Home Open a business Get started Apply for a license Plan for taxes. Run Grow Close. Forms by name Forms by subject Publications by name Publications by subject. Washington State taxpayers may deduct sales tax in and beyond In December of , President Obama signed an omnibus tax and spending package Consolidated Appropriations Act, that includes a permanent extension of the federal sales tax deduction for Washington residents.

More information For detailed information about the federal income tax deductions, please visit the IRS website. This lets you approximate your sales tax payments using average consumption patterns, taking into account the relevant tax rates and your income and family size. If a locality defined as a state-county-ZIP code combination has more than one taxing district, the calculator uses the average of the local sales tax rates among those districts to estimate the amount of sales tax the average taxpayer in that locality actually paid.

This assumes residents purchase taxable items throughout the locality, not just in the taxing jurisdiction where they reside. If you are deployed overseas, you can use the calculator to determine the sales tax you paid while you were in the United States. How It Works Enter your information for the tax year: Filing status Sales tax paid on specified large purchases Income Dependents claimed.

What You Need Have this information ready: W-2, or other income statements Receipts for specified large purchases ZIP code of your address and dates lived. The information you enter will not be saved or recorded. Does the Sales Tax Deduction Calculator use a methodology that differs from the worksheet in the Schedule A instructions?

Why are there different methodologies for determining my local optional sales tax deduction, depending on my state or locality? Among states that have local sales taxes, these two features create three basic categories: When the local tax base is the same as the state tax base and there is just one local sales tax rate throughout the state — The local sales tax amount can be included with the state table using a combined rate on the same items.

When the local tax base is the same as the state tax base, but the local sales tax rates vary throughout the state - The local sales tax amount can be derived from the state amount using the ratio of the local rate to the state rate. When both the local tax bases and the local sales tax rates vary throughout the state - The local sales tax amount must be derived independently from the state amount.