How to Claim State Sales Taxes on Income Tax

Taxpayers who itemize deductions are permitted to claim sales tax on purchases made throughout the year, or your state and local income tax. You cannot claim both, but either will reduce the amount of tax you owe by adding to the amount of itemized deductions you will claim in place of your standard deduction. To calculate your state sales tax on your income-tax return you'll need to add the tax on each receipt you had for the entire year, and keep those receipts for tax purposes, or you can use the IRS' general sales-tax calculator to obtain an amount, if you did not keep your receipts throughout the year.

Instructions

  1. Sales Tax Receipts

    • 1

      Gather all of your receipts for the tax year. The IRS permits taxpayers to claim sales tax on any item you paid sales tax for, including large-ticket items such as furniture and everyday items such as the fast-food lunch you picked up in the drive-thru.

    • 2

      Add only the sales-tax portion of each receipt. Keeping every receipt for every purchase made throughout the year means it will take a significant amount of time to add the amount of your sales tax. One way to eliminate the amount of time spent adding receipts together is to categorize your receipts by month and add the sales tax at the end of each month throughout the year on next year's income-tax return.

    • 3

      Input the total amount of your sales tax on line 5b of Schedule A, the Itemized Deductions form you file with your federal income tax return form 1040.

    General Sales Tax Calculator

    • 4

      Use the sales-tax-deduction calculator provided by the IRS if you did not keep your receipts. The link to the website containing the calculator is in Resources.

    • 5

      Follow the step-by-step instructions provided for you by the IRS' sales-tax-deduction calculator. Information required includes your income range, number of exemptions you are claiming, and the amount you paid on any major purchases, such as furniture and appliances that you have receipts for. Continue following the directions and answering questions about your individual tax situation until the IRS calculator provides you with an amount to claim on your return.

    • 6

      Input your general sales tax amount on line 5b of Schedule A. Fill out the remainder of Schedule A and enter your itemized deductions on your income-tax return. Review, sign, and mail your income-tax return.

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References

Resources

  • Photo Credit A young woman holding a pen, doing her taxes image by Christopher Meder from Fotolia.com

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