However, the IRS has created tables to give taxpayers a sales tax deduction amount as an alternative to saving their receipts throughout the year and tabulating the amount actually paid. The taxpayer has the option to save all of their receipts for the year and add up the amounts to gather their sales and use tax deduction. Do not include sales taxes paid on items used in your trade of business. Also include any state and local general sales tax paid for a leased motor vehicle.A home (including a mobile home or prefabricated home ) or a substantial addition to or major renovation of a home up to the amount of the general sales tax rate.An aircraft or boat, but include the tax only up to the amount of tax for the general sales tax rate.A motor vehicle (including a car, motorcycle, motor home, RV, sport utility vehicle, truck, van or off road vehicle) but include only the amount you would have paid up to the general sales tax rate.
Taxpayers also may add to their estimated tax, or the table amount, any sales taxes paid on these qualifying purchases: It can also impact any return if the Taxpayer had a large purchase with general sales tax. Note: While this deduction will mainly benefit taxpayers without a state income tax as in: Alaska, Florida, Tennessee, New Hampshire, Nevada, South Dakota, Texas, Washington and Wyoming – it also gives a larger deduction to any taxpayer who paid more in sales tax than income tax. Taxpayers will indicate by using a checkbox on line 5 of Schedule A which type of tax they’re claiming. The IRS allows for a deduction of sales and use tax paid as an option for those who itemize their deductions, letting them choose between deductions for state and local income taxes or state and local sales and use taxes.
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