What percent of sales tax is refunded if one chooses to deduct that over income tax. I'm from IL.?

Question

Also, how much would the average spender have to make to benefit from having their sales tax deducted rather than their income tax?

Answer 1

I didn't know it was an option. I'm from Michigan, maybe it's different here. If it is an option here as well, I am uniformed.

Answer 2

One can choose to deduct state sales tax instead of state income tax on Schedule A. That can provide a tax break for those who live in states without an income tax, for seniors, and for those who may have made large purchases.

That being said, there is no set percentage. Rather, the tax savings would be the deductible amount times your marginal tax rate. Of course, to claim the sales tax you have to itemize instead of taking the standard deduction.

Answer 3

If you itemize you may deduct either state sales taxes paid OR state income taxes paid. You should figure out which one works out best for you. In nearly all cases you'll come out ahead by deducting the state income tax.

Any itemized deduction only reduces your taxable income. And itemizing is only worthwhile if your total itemized deductions are greater than your standard deduction. The value of it in tax reduction depends upon your marginal tax rate and how much your itemized deductions exceed your standard deduction amount. If you're in a 15% tax bracket and your itemized deductions were $300 more than your standard deduction you'd get a reduction in tax liability of $45.00.

Answer 4

Any tax savings would be the deducted amount times your tax bracket percentage.

Answer 5

Sales tax is not deductible when buying for personal use.