Are state and local sales taxes deductible?

Answer 1

Yes, they are deductible on Schedule A as an itemized deduction. Be careful, though; the 2006 Schedule A form does not include a line for state and local sales tax because Congress almost allowed the deduction to expire (it was extended at the last minute in the "Tax Relief and Health Care Act of 2006").

To claim the deduction, you have to put it on the "State and local income tax" line but enter "ST" on the dotted line to the left of the amount. You can choose to deduct your actual expenses if you saved all of your receipts throughout the year, or you can use a standard amount based on your income. If you choose the standard amount, you can also add in any actual sales tax paid on large purchases such as an automobile, airplane, or construction materials for building or re-modeling your home.

Remember that this is an "either/or" situation; you cannot deduct both your state and local AND tax. The first IRS link below is a Sales Tax calculator to calculate how much your standard sales tax deduction would be. The second link gives the detailed explanation and instructions of the deduction. Good luck! :-)

Answer 2

If you itemize, you have a choice of deducting state and local income taxes OR sales tax. They have tables for a flat sales tax deduction amount, by state, by income, by family size. If you choose to deduct state and local income tax, the full amount is a deduction.

Answer 3

For Federal purposes, yes, but only as an itemized deduction (Schedule A) ; never as a deduction for state purposes.

If you pay sales tax on an apartment that you "own" as an investment property,
the state and local sales taxes are deductible on Schedule E.

Answer 4

Good thing to include on Schedule A if you itemize and if you live in a state that has no income tax. But if you paid state income tax that is usually the better deduction.
If you bought some big ticket item and paid sales tax on it that can be added to total. IE car, boat, motor home,,,

Answer 5

When you itemize deductions, you can choose either deduct your state income taxes or sales tax, but not both.

Answer 6

If you go 'long form' then yes. 'Supposedly' the state and local taxes are 'built into' the short form tax calculations.

If you go long form there is a set standard for state and local taxes but you can 'add to that' any taxes paid on large ticket items.

Hope this helps!

Answer 7

If you itemize, yes they are on your schedule A. If you take the standard deduction, then no they aren't.

Answer 8

In general, yes, but there are exceptions. And they are not allowed under the AMT.

Answer 9

NO! DON'T WE ALL WISH THEY WERE. ONLY REAL ESTATE, AUTO TAGS AND A FEW OTHER FEES, (THAT ARE REALLY TAXES) ARE DEDUCTABLE.

Answer 10

I wish....