Question

Can I deduct my state sales tax and my local sales tax?

Answer

You can deduct one of these:

  • State sales tax and local sales tax
  • State and local income taxes

If you deduct state sales tax and local sales tax, you can either:

  • Save sales receipts and deduct actual sales taxes paid.
  • Use the IRS’s sales tax tables to figure the deduction. The tables are on the Form 1040 instructions.

If you use the sales tax tables, you can also include sales taxes you paid for a car, boat, or other vehicle. However, the item might be taxed at a rate higher than the general sales tax rate. If so, you can only include the taxes you paid up to the amount of the general sales tax rate.

Report your deductible state income taxes or sales taxes on Schedule A. You can also deduct state real estate taxes and personal property taxes on Schedule A.

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